Gordon Corporation Reported the Following Equity Section on Its Current

question 18

Multiple Choice

Gordon Corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $11.50 per share.
$$\begin{array} { | l | r | } \hline\text { Common stock, } \$ 5 \text { par, } 100,000 \text { shares authorized, } 40,000 \text { shares } & \\\text { issued } & \$ 200,000 \\ \hline \text { Paid in capital in excess of par-common } & 120,000\\\hline \text { Retained earnings } &\underline { 290,000 } \\\hline \text { Total stockholders' equity } & \$ \underline { 610,000 }\\\hline\end{array}$$
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Which of the following would be TRUE if the company issued a 2-for-1 stock split?

• A) Retained earnings would be decreased by $460,000.
• B) Common stock would be increased by $200,000.
• C) Paid-in capital in excess of par would be increased by $260,000.
• D) None of the account balances would change.

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