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# Stockholder Equity Section

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After several profitable years, Planter Corporation's stock price had increased by 10-fold. Management prefers the stock price to be within range of the majority of potential investors, and on June 30, 2013, split its stock 2-for-1. Prior to the split, Planter's stockholders' equity section showed: Common Stock, 5,000 shares at \$100 par. After the split, Planter's stockholders' equity section showed:

a. Common stock, 10,000 shares at \$50 par
b. Common stock, 5,000 shares at \$200 par
c. Common stock, 2,500 shares at \$200 par
d. Common stock, 10,000 shares at \$100 par

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#### Solution Summary

This solution discusses exactly how Planter's stockholders' equity section should be reported after the 2-for-1 stock split.

\$2.19
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## Prepare a stockholder's equity section...Financial Accounting

PROBLEM #1

Prepare a stockholders' equity section. Financial Accounting

E11-8 Wells Fargo & Company, headquartered in San Francisco, is one of the nation's largest financial institutions. It reported the following selected accounts (in millions) as of December 31, 2004.

Retained earnings \$27,143
Preferred stock 270
Common stock-\$1_
par value, authorized 6,000,000,000 shares;
issued 1,736,381,025 shares 2,894
Treasury stock-41,789,388 shares (2,247)
Additional paid-in capital-common stock 9,806

Instructions
1. Prepare the stockholders' equity section of the balance sheet for Wells Fargo as of December 31, 2004.

2. Comment on how this information is important to the company accounting reports and any other general comment to learn understand this concept.

PROBLEM #2

Prepare a stockholders' equity section. Financial Accounting

E11-10 The following accounts appear in the ledger of Sycamore Inc. after the books are closed at December 31, 2007.
Common Stock (no-par, \$1 stated value, 400,000 shares authorized,
200,000 shares issued) \$ 200,000
Paid-in Capital in Excess of Stated Value-Common Stock 1,200,000
Preferred Stock (\$50 par value, 8%, 40,000 shares authorized, 12,000
shares issued) 600,000
Retained Earnings 900,000
Treasury Stock (10,000 common shares) 64,000
Paid-in Capital in Excess of Par Value-Preferred Stock 24,000
Reporting and Analyzing Stockholders' Equity
Instructions
1. Prepare the stockholders' equity section at December 31, assuming \$100,000 of retained
earnings is restricted for plant expansion. (Use Note R.)

Note R: Retained earnings is restricted for the cost of treasury stock, \$80,000.

2. Comment on what makes this problem different from problem #1 and any other general comment to learn understand this concept.

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