Mario's Has 18,000 Shares of Stock Outstanding with a Par

question 57

Multiple Choice

Mario's has 18,000 shares of stock outstanding with a par value of $1 per share and a market price of $4 a share.The balance sheet shows $18,000 in the common stock account,$368,000 in the paid in surplus account,and $64,000 in the retained earnings account.The firm just announced a 5-for-1 stock split.What will the paid in surplus account value be after the split?

• A)$336,000
• B)$368,000
• C)$426,000
• D)$548,000
• E)$606,000

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Definitions:

Unit Sales

The measure of the total quantity of a product sold, often used as a metric for tracking the performance of consumer goods.

Revenue

The total income generated from normal business operations and other activities over a specific period of time.

Items Sold

The total quantity of products or services sold by a business within a specific period.

Razor-And-Razor-Blade

A business model that sells a primary product at a low price (or gives it away) to drive the sales of related consumable products.