On January 1, 2015, WVC Split Its Common Shares 4

question 139

Multiple Choice

On January 1, 2015, WVC split its common shares 4 for 1 when the market value was $80 per share.Prior to the split, WVC had 50,000 common shares issued and outstanding (average issue price $12 per share) .After the split, the average issue price of the shares was reduced:

• A)To $3 per share.
• B)By $3 per share.
• C)To $4 per share.
• D)No change in the par value.
• E)To $2.40 per share.

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Definitions:

LIFO

An inventory valuation method, "Last-In, First-Out," where the most recently produced items are recorded as sold first.

Average Cost

A method of inventory valuation which calculates the cost of goods sold based on the average cost of all similar items in inventory.

Periodic Inventory System

An accounting method where the inventory is physically counted at specific intervals to determine the cost of goods sold and the ending inventory balance.

Cost Of Goods Sold

Represents the direct costs attributable to the production of the goods sold by a company, including material and labor costs.