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On August 10, 2020, Geller, Inc
On August 10, 2020, Geller, Inc.'s board of directors declared a 3-for-1 stock split of its $9 par value common stock, of which 400,000 shares were authorized and 125,000 were issued and outstanding. The market value on that date was $60 per share. On the same date, the balance of additional paid- in capital was $3,000,000, and the balance of retained earnings was $3,250,000. Prepare the stockholders' equity section of the company's balance sheet BEFORE and AFTER the stock split. MUST be formally written as shown in the homework example to receive full credit.
Expert Solution
| Geller Inc | |
| Balance Sheet | |
| Stockholders Equity Section | |
| August 10, 2020 (Before Stock split) | |
| Stockholders Equity | |
| Common stock ($9 par value, 400,000 shares authorized, 125,000 shares issued and outstanding) | $ 1,125,000 |
| Paid in capital In excess of par value, Common stock | $ 3,000,000 |
| Total paid in capital | $ 4,125,000 |
| Retained earnings | $ 3,250,000 |
| Total stockholders Equity | $ 7,375,000 |
| Geller Inc | |
| Balance Sheet | |
| Stockholders Equity Section | |
| August 10, 2020 (After Stock split) | |
| Stockholders Equity | |
| Common stock ($3 par value, 400,000 shares authorized, 375,000 shares issued and outstanding) | $ 1,125,000 |
| Paid in capital In excess of par value, Common stock | $ 3,000,000 |
| Total paid in capital | $ 4,125,000 |
| Retained earnings | $ 3,250,000 |
| Total stockholders Equity | $ 7,375,000 |
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