On September 1,a Corporation with 50,000 Shares of $5 Par

question 4

Multiple Choice

On September 1,a corporation with 50,000 shares of $5 par value common stock and $1,000,000 of Retained Earnings issues a 2-for-1 stock split.The market price of the stock on that date is $12 per share.Which of the following statements is correct concerning this stock split?

• A) Contributed capital will increase by $250,000.
• B) Retained Earnings will decrease by $600,000.
• C) Dividends payable will increase by 250,000.
• D) No entry will be made for this transaction.

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