At the end of the year, the records of NCIS Corporation provided the following s
ID: 2512068 • Letter: A
Question
At the end of the year, the records of NCIS Corporation provided the following selected and incomplete data:
Common stock (par $10); no changes in account during the year.
Shares authorized, 250,000.
Shares issued: _______ (all shares were issued at $15 per share. Total cash collected: $2,115,000.
Treasury stock: 5,000 shares (repurchased at $15 per share).
The treasury stock was acquired after a stock split was announced.
Net income, $263,840.
Dividends declared and paid: $144,160.
Retained earnings beginning balance: $605,000.
a) Assume that the board of directors voted a 2-for-1 stock split. After the stock split, calculate the par value per share and the number of outstanding shares.
Explanation / Answer
Par value per share will be $ 5 as the share split is 2 for 1.
i.e 1 share before stock split becomes 2 shares now
So the one share of $ 10 will now become two shares of $ 5 each
Outstanding shares will be = 250,000 x 2 = 500,000 shares - treasury shares
= 500,000 - 5000 = 495,000 shares
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.