Lynn Company has outstanding 52,000 shares of $10 par value common stock and 25,000 shares of $20

Question:

Lynn Company has outstanding 52,000 shares of $10 and 25,000 shares of $20 preferred stock (8 percent). On December 1, 2009, the board of directors voted an 8 percent cash dividend on the preferred stock and a 30 percent stock dividend on the . At the date of declaration, the was selling at $35 and the preferred at $20 per share. The dividends are to be paid, or issued, on February 15, 2010. The annual accounting period ends December 31.

Required:
Explain the comparative effects of the two dividends on the assets, liabilities, and stockholders€™ equity
(a) Through December 31, 2009,
(b) On February 15, 2010, and
(c) The overall effects from December 1, 2009, through February 15, 2010.
A schedule similar to the following might behelpful:

Lynn Company has outstanding 52,000 shares of $10 par value

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...