Core Corporation Had 400,000 Shares of $2 Par Value Common

question 22

Essay

Core Corporation had 400,000 shares of $2 par value common stock authorized.On December 31,2018,there were 200,000 shares issued and outstanding.The market value of its common stock on that date was $100 per share.On January 5,2019,the board of directors declared a five-to-four stock split (i.e. ,a 25% increase in the number of shares).
Required:
Part a.Briefly explain the how a stock spilt affects the stockholders' equity accounts and the total resources of the company.
Part b.Assume that you have 100 shares of Core Corporation common stock.Determine how many shares will you have after the stock split.
Part c.Determine how the stock split will impact the number of authorized shares,the number of issued and outstanding shares,and the par value per share.
Part d.Determine the total par value of the company's issued and outstanding shares (that is,the balance of the Common Stock account)before the stock split and after the stock split.

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Definitions:

Indirect Materials

Materials that are used in the production process but are not directly traceable to a finished product, such as lubricants and cleaning supplies used in a manufacturing facility.

Prime Cost

The combined direct costs of manufacturing a product, specifically direct materials and direct labor.

Plant Janitor's Wages

The compensation paid to janitorial staff responsible for cleaning and maintaining industrial or manufacturing facilities.

Direct Labor Wages

The compensation paid to employees who are directly involved in the production of goods or the provision of services.