3. The owners' equity accounts for Vidi International are shown here: Common stock ($.50 par value) $ 42,500 Capital surplus 355,000 Retained earnings 778,120 Total...

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Finance

3.
The owners'equity accounts for Vidi International are shown here:

  Common stock ($.50 par value) $ 42,500
  Capital surplus 355,000
  Retained earnings 778,120
     Total owners’ equity $ 1,175,620

a-1.
If the company declares a five-for-one stock split, how manyshares are outstanding now? (Do not round intermediatecalculations.)
a-2. Whatis the new par value per share? (Do not round intermediatecalculations and round your answer to 3 decimal places, e.g.,32.161.)
b-1. Ifthe company declares a one-for-four reverse stock split, how manyshares are outstanding now? (Do not round intermediatecalculations.)
b-2. Whatis the new par value per share? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)

Answer & Explanation Solved by verified expert

3.7 Ratings (613 Votes)

Solution a1 New shares outstanding 425000 Working Notes Fiveforone stock split means 5 new shares for every 1 old share New shares outstanding existing no of shares x 51 85000 x 51 425000 before split currently no of shares See Answer

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3. The owners'equity accounts for Vidi International are shown here: Common stock ($.50 par value)$42,500 Capital surplus355,000 Retained earnings778,120 Total owners’ equity$1,175,620 a-1.If the company declares a five-for-one stock split, how manyshares are outstanding now? (Do not round intermediatecalculations.)a-2.Whatis the new par value per share? (Do not round intermediatecalculations and round your answer to 3 decimal places, e.g.,32.161.)b-1.Ifthe company declares a one-for-four reverse stock split, how manyshares are outstanding now? (Do not round intermediatecalculations.)b-2.Whatis the new par value per share? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)

a-1.	If the company declares a five-for-one stock split, how manyshares are outstanding now? (Do not round intermediatecalculations.)
a-2.	Whatis the new par value per share? (Do not round intermediatecalculations and round your answer to 3 decimal places, e.g.,32.161.)
b-1.	Ifthe company declares a one-for-four reverse stock split, how manyshares are outstanding now? (Do not round intermediatecalculations.)
b-2.	Whatis the new par value per share? (Do not round intermediatecalculations and round your answer to 2 decimal places, e.g.,32.16.)


Common stock ($.50 par value)	$	42,500
Capital surplus		355,000
Retained earnings		778,120

Total owners’ equity	$	1,175,620