Jones co. had 50,000 shares of $5 par value common stock outstanding at january 1. on august 1, jones declared a 5% stock dividend followed by a two-for-one stock split on september 1. what amount should jones report as common shares outstanding at december 31?

The 105,000 shares should Jones report as common shares outstanding at December 31

Explanation:

The computation of the common shares outstanding is shown below:

= (Number of shares + Number of shares × dividend rate) × stock split ratio

= (50,000 shares + 50,000 shares × 5%) × 2

= (50,000 shares + 2,500 shares) × 2

= 52,500 shares × 2

= 105,000 shares

As we have to compute only outstanding shares so no par value would be considered in the computation part. Hence, it is ignored

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