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Part A On September 1st, the board of directors of Sparrow, Inc., declares and issues a stock dividend on its 10,000, $1 par, common shares.
Part A
- On September 1st, the board of directors of Sparrow, Inc., declares and issues a stock dividend on its 10,000, $1 par, common shares. The market price of the common stock is $30 on this date.
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- Record the stock dividend assuming a small (10%) stock dividend.
- Record the stock dividend assuming a large (100%) stock dividend.
- Record the transaction assuming a 2-for-1 stock split (hint: there may not be a journal entry to record).
- On May 15th, Hawk Companys board declares a cash dividend of $0.15 per share payable on June 10th to all stockholders of record on May 31st.
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- Record Hawks May 15th journal entry for the declaration of the cash dividends for its 300,000 outstanding shares of common stock.
- Record the June 10th payment date journal entry.
Part B
In Part B, you will utilize the knowledge about equity analysis that was covered on the M6: Insights 2Earned Capital, Reporting Equity, and Equity Analysis page.
The financial statements of Blue Jay Corporation include the following selected data:
($ in thousands, except stock price) | 2031 | 2030 |
---|---|---|
Sales | $728,121 | $751,558 |
Net income | 16,012 | 13,626 |
Dividends | 4,087 | 3,885 |
Stockholders' equity, end of year | 235,153 | 221,457 |
Shares outstanding | 45,000 | 40,000 |
Average stock price | $ 5.40 | $ 4.70 |
Calculate the following amounts for 2031 (round earnings per share to two decimal points; round all other ratios to one decimal point):
- Return on equity.
- Dividend yield.
- Earnings per share.
- Price-earnings ratio.
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