Lynbrook, Inc. was formed on January 2, 2017 with the authorization to issue 600,000 shares of $2 par value common stock and 50,000 shares of $100 par value 5% cumulative preferred stock. During 2017, all the preferred stock was issued at par, and 400,000 shares of common stock were sold for $25 per share.

During its first five years of business (2017 through 2021), the company earned income totaling $5,500,000 and paid dividends of 30 cents per share each year on the common stock outstanding.

On January 2, 2019, the company purchased 50,000 shares of its own common stock in the open market for $600,000. On January 2, 2020, it reissued 20,000 shares of this treasury stock for $300,000. The remaining 30,000 were still held in treasury at December 31, 2021.

Requirements:

1. Management would like you to prepare the stockholders equity section of the Balance Sheet for Lynbrook, Inc. at December 31, 2021. They also asked that you provide supporting detail for all of the numbers in your stockholders equity section.

2. Lynbrook is considering awarding common stock a 2-for-1 stock split in early 2022.

Management has asked you to describe what will happen to the following items:

Market price (currently $40/share)

Par value

Number of shares of common stock

- Authorized

- Issued

- Outstanding