Exercise 11.14 (Static) Treasury Stock and Stock Split (LO11-8, LO11-9)

Twin Towns, Incorporated, was authorized to issue 300,000 shares of common stock and originally issued 100,000 shares of $10 par value stock at $18 per share. Subsequently, 25,000 shares were repurchased at $20, of which 10,000 were subsequently resold at $23.

Assume the companys retained earnings balance is $120,000.

Required:

1. Prepare the stockholders equity section of Twin Townss balance sheet, including all appropriate disclosures.
2. Briefly explain how the declaration and distribution of a 2-for-1 stock split subsequent to the above transactions would affect the stockholders equity section you have prepared.

Briefly explain how the declaration and distribution of subsequent to the above transactions would affect th equity section you have prepared. Prepare the stockholders' eq all annronniate dicslncures