Washington Corporation has 1000000 shares of common stock is

Washington Corporation has 1,000,000 shares of common stock issued and outstanding with a SI par value. If Washington declares a one-for-four reverse stock split, how many shares will be issue standing and what will the par value be after the split? E13.19 d and out- 5 E1320 Refer to E13.19. If Washington declares a four-for-one stock split, how many new shares will be issued, what will the par value be, and what will the legal capital of the corporation be?

Solution

New Shares to be issued = 1,000,000 x 4/1 =4,000,000

The equity accounts will be unchanged except for number of shares outstanding.

Common Stock ( 4,000,000 shares outstanding ) $1,000,000

Legal Capital of the Corporation will be $1,000,000