Effective April 27,2005 the stockholders of Dorr Corporation approved a two for one split of the company's common stock and an increase in authorized common shares from 100,000 shares (par value of $20 per share) to 200,000 shares (par value of $10 per share). The stock split shares were issued on June 30, 2005. Dorr stockholders' equity accounts immediately before issuance of the stock split shares were:
Common stock ($20 par value); authorized
Shares, shares outstanding 50,000 1,000,000
Additional paid-in capital $150,000
Retained earnings 1,350,000
After issuing the stock split shares, what are the balances of additional paid in capital and retained earnings in Dorr's June 30, 2005 statement of stockholders' equity?
When a company believes that investors are shying away from purchasing or holding its stock because the market price is too high or too low, the board of directors may approve a stock split. A stock split is similar to a stock dividend in that new ...
This provides the steps to calculate the balances of additional paid in capital and retained earnings in Dorr's June 30, 2005 statement of stockholders' equity