Assume That Milo Company's Stockholders' Equity Category of the Balance

question 64

Essay

Assume that Milo Company's Stockholders' Equity category of the balance sheet appears as follows as of January 1,2017: $\begin{array}{lr}\text { Common stock, } \$ 15 \text { par, } 7,000 \text { shares issued and outstanding } & \$ 105,000 \\\text { Additional paid-in capital—common } & 70,000 \\\text { Retained earnings } & \underline{30,000} \\\text { Total stockholders' equity } & \underline{ \$ 205,000}\end{array}$
Assume that Milo's common stock is selling at $35 per share on that date.
Required
What is the effect on the Stockholders' Equity section of Milo's balance sheet if the company issues a 3-for-1 stock split on January 2,2017?

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