Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

is a manufacturer of joke and novelty products for perpetrators of practical jokes. The corporation has paid several cash dividends throughout Year 6 , the

is a manufacturer of joke and novelty products for perpetrators of practical jokes. The corporation has paid several cash dividends throughout Year 6, the current year. It is also declaring a stock dividend to its stockholders as the calendar year-end approaches. You've been brought in as a consultant to assist with this process, and also to help determine whether some missing information can be determined before the distribution of the stock dividend is made. The company has two classes of stock: common stock and cumulative preferred stock.
Number of common shares authorized
900,000
Number of common shares issued
750,000
Par value of common shares
$20
Par value of cumulative preferred shares
$30
Paid-in capital in excess of par-common stock
$7,000,000
Paid-in capital in excess of par-preferred stock
$0
Total retained earnings before the stock dividend is declared
$33,500,000
No treasury share have been reissued.
\table[[,,Preferred Dividends,Common Dividends],[,Total Cash,,,,],[Year,Dividends,Total,Per Share,Total,Per Share],[Year 1,30,000,30,000,0.20,0,0.00],[Year 2,54,000,54,000,0.36,0,0.00],[Year 3,105,000,51,000,0.34,54,000,0.09],[Year 4,135,000,45,000,0.3,90,000,0.15],[Year 5,153,000,45,000,0.3,108,000,0.18],[Year 6,225,000,45,000,0.3,180,000,0.3]]
Stock Dividend
The company declared a 2% common stock dividend on December 1, and would like you to compute the following pieces of missing information. The market value of the common shares is $26 on December 1, and is $30 on the actual distribution date of the stock, December 31.
Fill in the missing information in the following table, using the information given and your work on the other panels. All "before" items are before the stock dividend was declared. All "after" items are after the stock dividend was declared and closing entries were recorded at the end of the year.
Total paid-in capital before the stock dividend
Total retained earnings before the stock dividend
Total stockholders' equity before the stock dividend
Total paid-in capital after the stock dividend
Total retained earnings after the stock dividend-
Total stockholders' equity after the stock dividend
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles A Business Perspective

Authors: Roger H. Hermanson, James Don Edwards, Michael W. Maher

1st Edition

1680921851, 978-1680921854

More Books

Students also viewed these Accounting questions