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    Janelle101's Avatar
    Janelle101 Posts: 60, Reputation: 1
    Junior Member
     
    #1

    Feb 12, 2010, 02:01 PM
    Common Stocks
    help me with the formula to calculate these problems:confused:
    A corporation purchase 10,000 shares of its own $20 par common stock for $35 per share, recording it at cost. What will be the effect on total stockholders equity?

    A corporation has 50,000 shares of $100 par value stock outstanding. If the corporation issued a 4-to-1 stock split, the number os shares outstanding after the split will be?
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Feb 13, 2010, 01:07 AM

    Do you know the entry for the first one? If so, what in there is stockholder's equity and how would that affect it?'

    As for a stock split, think of it like a pie. Each share is a pie and it's worth $100. If you do a split, you'll split up the pie into smaller pieces, but they'll be less per piece. So if I split a pie 4 ways, I have 4 times as many pieces, and they are only now worth $25 each. If you split each share of stock into 4 pieces, how many total shares would you end up with?

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