Question

On June 30, Sharper Corporation's stockholders' equity section of its balance sheet appears as follows before any stock dividend or split. Sharper declares and immediately distributes a 50% stock dividend. Common stock-$10 par value, 120,000 shares authorized, 64,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity $ 640,000 270,000 695,000 $1,605,000 Exercise 11-7 Stock split LO P2 Assume that instead of distributing a stock dividend, Sharper did a 3-for-1 stock split. Required: (0) Prepare the updated stockholders' equity section after the split. (2) Compute the number of shares outstanding after the split. Complete this question by entering your answers in the tabs below. Kequired 1 Required 2 Prepare the updated stockholders' equity section after the split. SHARPER CORPORATION Stockholders' Equity Section of the Balance Sheet

Answer 1

Sharper corporation

Stockholder's Equity section of Balance sheet.

june 30.

common stock-$3.3333 par value, 360,000 shares authorised, 192,000 shares issued and outstanding	$640,000
paid in capital inexcess of par value common stock	270,000
retained earnings	695,000
total stockholder's equity	1,605,000

2.

number of share outstanding = 192,000.

working:

since 3 for 1 is the ratio of stock split, the number of shares outstanding will be =64,000 existing shares * 3/1 =>192,000.

par value of common stock =$10 existing par value * 1/ 3 new shares =>$3.3333