Gordon Corporation Reported the Following Equity Section on Its Current

question 143

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. 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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Definitions:

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions.

Problem Solver

An individual or tool that identifies, analyzes, and finds solutions for complex or simple issues.

Linguistic-Relativity Hypothesis

The theory that the structure of a language affects its speakers' world view or cognition, suggesting that language and thought are intertwined in complex ways.

Semanticity

The quality of language by which words and symbols have meaning and can be used to communicate complex ideas.