The owners’ equity accounts for Freya International are shown here. Common stock

ID: 2749412 • Letter: T

Question

The owners’ equity accounts for Freya International are shown here.

Common stock ($0.60 par value) $30,000

Capital surplus $385,000

Retained earnings $838,120

Total owners’ equity $1,253,120

a-1. If Freya declares a five-for-one stock split, how many shares are outstanding now?

New shares outstanding ______________

a-2. What is the new par value per share?

New par value $ _____________ per share

b-1. If Freya declares a one-for-five reverse stock split, how many shares are outstanding now?

New shares outstanding ______________

b-2. What is the new par value per share?

New par value $ _____________ per share

a1) 250,000 (30000/0.6)*5 a2) $ 0.12 0.6/5 b1) 10,000 (30000/0.6)*1/5 b2) $ 3.00 0.6*5

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