Determining the effects of stock splits on the accounting re

Determining the effects of stock splits on the accounting records LO 8-7 The market value of Yeates Corporation’s common stock had become excessively high. The stock was currently selling for $240 per share. To reduce the market price of the common stock, Yeates declared a 3-for-1 stock split for the 100,000 outstanding shares of its $10 par value common stock. Required: Determine the number of common shares outstanding and the par value after the split. (Round par value answer to 2 decimal places.)

Solution

Required: Determine the number of common shares outstanding and the par value after the split.

Number of common Share outstanding = 100000*3 = 300000 Shares

Par value = 10/3 = $3.33 per share