Reporting a Stock Split

Starbucks Corporation disclosed the following on a recent stock split in its annual Form 10-K report for the year ended September 27, 2015.

Stock Split (excerpt from Note 1)On April 9, 2015, we effected a 2-for-1 stock split of our $0.001 par value common stock for shareholders of record as of March 30, 2015. All share and per-share data in our consolidated financial statements and notes has been retroactively adjusted to reflect this stock split. We adjusted shareholders equity to reflect the stock split by reclassifying an amount equal to the par value of the additional shares arising from the split from retained earnings to common stock during the second quarter of fiscal 2015, resulting in no net impact to shareholders equity on our consolidated balance sheets.

In addition, the statement of equity for Starbucks on September 27, 2015, reported the following: the company increased common shares by 749.4 million shares, increased the common stock account by $0.8 million, and decreased retained earnings by $0.8 million related to this effected stock split.

Required a. What journal entry did the company record for this effected stock split?

Question 6 Partially correct Mark 18.00 out of 20.00 P Flag question Reporting a Stock Split Starbucks Corporation disclosed the following on a recent stock split in its annual Form 10-K report for the year ended September 27, 2015. Stock Split (excerpt from Note 1)-On April 9, 2015, we effected a 2-for-1 stock split of our $0.001 par value common stock for shareholders of record as of March 30, 2015. All share and per-share data in our consolidated financial statements and notes has been retroactively adjusted to reflect this stock split. We adjusted shareholders' equity to reflect the stock split by reclassifying an amount equal to the par value of the additional shares arising from the split from retained earnings to common stock during the second quarter of fiscal 2015, resulting in no net impact to shareholders' equity on our consolidated balance sheets. In addition, the statement of equity for Starbucks on September 27, 2015, reported the following the company increased common shares by 749.4 million shares, increased the common stock account by $0.8 million, and decreased retained earnings by $0.8 million related to this effected stock split. Required a. What journal entry did the company record for this effected stock split? Account Name Dr. Cr. Retained Earnings Common Stock b. What was the impact of the effected stock split on (1) the number of common shares, (2) par value per common share, (3) retained earnings, (4) paid-in capital, (5) net income, (6) stockholders' equity, and (7) market price? Effected Stock Split Impact 1. Number of common shares Increased 2. Par value per common share No change 3. Retained earnings Decreased 4. Paid-in capital Increased 5. Net income No change 6. Stockholders' equity, total No change 7. Market price Decreased