Question
On September 1, a corporation with 80,000 shares of $5 par value common stock and $1,000,000 of Retained Earnings issues a 100% stock dividend. The
On September 1, a corporation with 80,000 shares of $5 par value common stock and $1,000,000 of Retained Earnings issues a 100% stock dividend. The market price of the stock on that date is $12 per share. Which of the following statements is correct concerning this stock split?
Retained Earnings will decrease by $960,000.
No entry will be made for this transaction.
Retained Earnings will decrease by $400,000.
Contributed capital will increase by $960,000.
On December 31, 2018, Tamber Company had 100,000 shares of $5 par value common stock and 60,000 shares of 8%, $10 par value preferred stock. Tamber declared a $150,000 dividend in the year 2018. The company did not pay any dividends in years 2016 and 2017 and they had $10,000 of unpaid preferred dividends from the year 2015. All dividends had been paid prior to the year 2015.
Assuming that the preferred dividend is NOT cumulative, how much will Tamber distribute to the preferred shareholders and common shareholders in year 2018?
$10,000 to preferred shareholders, $140,000 to common shareholders.
$48,000 to preferred shareholders, $102,000 to common shareholders.
$150,000 to preferred shareholders, $0 to common shareholders
$144,000 to preferred shareholders, $6,000 to common shareholders
$58,000 to preferred shareholders, $92,000 to common shareholders.
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