SesameSweet Inc

question 182

Multiple Choice

SesameSweet Inc. has 220,000 shares outstanding with a market price of $12 per share. On the balance sheet, common stock is $760,000, and retained earnings are $275,000. There are no
Transactions costs.
Suppose SesameSweet declares a 2-for-1 stock split. What happens to total owners' equity on the
Balance sheet?

• A) The account remains unchanged.
• B) The account increases by $22,000.
• C) The account increases by $44,000.
• D) The account increases by $242,000.
• E) The account increases by $264,000.

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Definitions:

Output

Output usually refers to the total amount of goods and services produced by a company, industry, or economy within a specific period.

Total Revenue

The full amount of income generated by the sale of goods or services by a company before any costs or expenses are subtracted.

ATC

Average Total Cost, which is calculated by dividing the total cost of production by the quantity of output produced. It includes both fixed and variable costs.

MC

Marginal Cost, which refers to the increase or decrease in the total cost of production when the output is adjusted by one additional unit.