Team Shirts issued a 2-for-1 stock split.The balance in retained earnings just before the split was $45,000.There were 15,000 shares outstanding on the day of the split.The $1 par value stock had a market price of $17.25 on the day of the split.Retained earnings will increase (decrease)after the split by ________.

Question

Quizplus · Accepted Answer

A 2-for-1 stock split does not affect the balance in retained earnings. It simply doubles the number of shares outstanding while halving the market price per share, without any financial transaction that would impact retained earnings.

Team Shirts Issued a 2-For-1 Stock Split