The Shareholders Equity section the balance sheet of Chequessett Corporation is presented in the following table Shareholders' Equity Preferred Stock, $25 par, 4 8 , cumulative, nonparticipating, 10,000 shares issued and outstanding $250,000 Common Stock, $1 Par, 500,000 shares issued and outstanding 500,000 Paid in Capital in Excess of Par Preferred 25,000 Paid in Capital in Excess of Par Common 2,785,000 Retained Earnings 12,700,000 Total Shareholders' Equity $16,260,000 Instructions Answer the following questions Show supporting calculations Chequessetts Board of Directors declared $750,000 in total dividends to be paid Assuming that no dividends were declared or paid in the prior two years, calculate the amounts that will be paid to common and to preferred Chequessetts Board of Directors declared a 12 stock dividend on the common stock when the stock was trading at $12 per share Calculate the net effect on retained earnings as a result of the dividend declaration Chequessetts Board of Directors declared a 4 for 1 traditional stock split on the common stock when the stock was trading at $10 50 per share What is the par value per share after the stock split

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Posted on Jul 01, 2024

The Shareholders Equity section the balance sheet of Chequessett Corporation is presented in the following table.

Shareholders' Equity
Preferred Stock, $25 par, 4.8%, cumulative, nonparticipating, 10,000 shares issued and outstanding	$250,000
Common Stock, $1 Par, 500,000 shares issued and outstanding	500,000
Paid-in Capital in Excess of Par - Preferred	25,000
Paid-in Capital in Excess of Par - Common	2,785,000
Retained Earnings	12,700,000
Total Shareholders' Equity	$16,260,000

Instructions

Answer the following questions. Show supporting calculations.

Chequessetts Board of Directors declared $750,000 in total dividends to be paid. Assuming that no dividends were declared or paid in the prior two years, calculate the amounts that will be paid to common and to preferred.
Chequessetts Board of Directors declared a 12% stock dividend on the common stock when the stock was trading at $12 per share. Calculate the net effect on retained earnings as a result of the dividend declaration.
Chequessetts Board of Directors declared a 4-for-1 traditional stock split on the common stock when the stock was trading at $10.50 per share. What is the par value per share after the stock split?