Identify the effectsboth the direction and the dollar amountof these transactions on the total stockholders equity of

Question:

Identify the effects—both the direction and the dollar amount—of these transactions on the total stockholders’ equity of Niles Corporation. Each transaction is independent.

a. Declaration of cash dividends of $85 million.

b. Payment of the cash dividend in (a).

c. A 5% stock dividend. Before the dividend, 68 million shares of $1.00 par common stock were outstanding; the market value was $13.87 at the time of the dividend.

d. A 25% stock dividend. Before the dividend, 68 million shares of $1.00 par common stock were outstanding; the market value was $17.25 at the time of the dividend.

e. Purchase of 1,600 shares of treasury stock (par value $1.00) at $16.25 per share.

f. Sale of 800 shares of the treasury stock for $18.00 per share. Cost of the treasury stock was $16.25 per share.

g. A 3-for-1 stock split. Prior to the split, 68 million shares of $1.00 par common stock were outstanding.

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... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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