At the Time That Stellar Company Issued a 2-For-1 Stock

question 87

Multiple Choice

At the time that Stellar Company issued a 2-for-1 stock split, the company had 1,000 shares of $5 par value common stock outstanding. Stockholders' equity also included $14,000 of additional paid in capital in excess of par value and $20,000 of retained earnings. Immediately after the stock split,

• A) the balance in the common stock account would be $10,000.
• B) the amount of paid-in capital would be $20,000.
• C) the balance in the retained earning account would be $15,000.
• D) the balance in the common stock account would be $5,000.

---

Definitions:

Exchange Rate

An exchange rate is the value of one currency for the purpose of conversion to another currency.

Appreciated

In financial terms, it means an increase in the value of an asset or currency.

Depreciated

A decrease in the value of an asset over time due to wear and tear, age, or obsolescence.

International Value

The worth of a product or service recognized across different countries and cultures, often influencing its global marketability and pricing.