Effective April 27, 2007 the stockholders of Bennett Corporation approved a two for one split of the company’s common stock, and an increase in authorized common shares from 100,000 shares (par value $20 per share) to 200,000 shares (par value $10 per share). Bennett’s stockholders’ equity accounts immediately before issuance of the stock split shares were as follows:
|
Common stock, par value $20; 100,000 shares authorized; 50,000 shares outstanding |
$1,000,000 |
|
Additional paid in capital (premium of $3 per share on issuance of common stock) |
150,000 |
|
Retained earnings |
1,350,000 |
What should be the balances in Bennett’s additional paid in capital and retained earnings accounts immediately after the stock split is effected?
|
Additional Paid in Capital |
Retained Earnings |
|
|
$0 |
$500,000 |
|
|
$150,000 |
$350,000 |
|
|
$150,000 |
$1,350,000 |
|
|
$1,150,000 |
$350,000 |