Suppose Nolan, Inc., has common stock, $8 par, 500,000 shares authorized, 120,000 shares issued and outstanding. The

Question:

Suppose Nolan, Inc., has common stock, $8 par, 500,000 shares authorized, 120,000 shares issued and outstanding. The company also has Paid-in Capital in Excess of Par, common of $225,000 and Retained Earnings of $298,000. The company decided to split its common stock 2-for-1 in order to decrease the market price of its stock. The company's stock was trading at $26 per share immediately before the split.

1. Show how the stockholders' equity section of Nolan, Inc.'s balance sheet would appear after the stock split.

2. Which account balances changed after the stock split? Which account balances were unchanged?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...