Accounting for a stock split Decorator Plus Imports recently reported the following stockholders’ equity (adapted except par value per share):
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Paid in capital: |
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Common stock, $1 par, 480,000,000 shares |
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authorized, 114,000,000 shares issued |
$ 114,000,000 |
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Paid in capital in excess of par |
140,000,000 |
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Total paid in capital |
$ 254,000,000 |
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Retained earnings |
650,000,000 |
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Total stockholders’ equity |
$ 904,000,000 |
Suppose Decorator Plus split its common stock 2 for 1 in order to decrease the market price per share of its stock. The company’s stock was trading at $20 per share immediately before the split.
Requirements
1. Prepare the stockholders’ equity section of Decorator Plus Imports’ balance sheet after the stock split.
2. Were the account balances changed or unchanged after the stock split?