Pryor Corporation issued a 2-for-1 common stock split.The shares had been originally issued at $10 per share.At what amount should retained earnings be capitalized for the Shareholders' Equity 15- 15 additional shares issued?
A)there should be no capitalization of retained earnings
B)$10 per share
C)market value on the declaration date
D)market value on the payment date

Question

Quizplus · Accepted Answer

In a stock split, there is no capitalization of retained earnings. The number of shares increases, but the par value per share decreases proportionally, leaving the total equity unchanged.

Pryor Corporation Issued a 2-For-1 Common Stock Split