The Baxter Company has 30,000 shares of $3 par common stock outstanding. The company’s board of directors declares a 3-for-1 stock split when the market price is $9 per share. Which of the following statements are correct? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

 

• After the stock split, the company will have 10,000 shares, each with an approximate market value of $9.unanswered
• After the stock split, the company will have 90,000 shares, each with an approximate market value of $3.unanswered
• The par amount of the shares becomes $1 per share.unanswered
• No journal entry is recorded.unanswered

 

Knowledge Check  02

Craft declares and distributes a 2-for-1 stock split in the form of a 100% stock dividend and distributes 1,000 shares when the market value of the $1 par common stock is $12 per share. The company chooses not to reclassify earned capital as invested capital with regards to this transaction. Prepare the appropriate journal entry.

Answer rating: 100% (QA)

The correct answer is option B option c and opt... View the full answer