Lynn Company has outstanding 60,000 shares of $10 par value common stock and 25,000 shares of $20
Question:
Lynn Company has outstanding 60,000 shares of $10 par value common stock and 25,000 shares of
$20 par value preferred stock (8 percent). On December 1, 2004, the board of directors voted an 8 percent cash dividend on the preferred stock and a 10 percent common stock dividend on the common stock. At the date of declaration, the common stock was selling at $35 and the preferred at $20 per share. The dividends are to be paid, or issued, on February 15. 2005. The annual accounting period ends December 3 1 Required:
Explain the comparative effects of the two dividends on the assets, liabilities, and stockholders' equity
(a) through December 31, 2004,
(b) on February 15, 2005, and
(c) the overall effects from December 1, 2004, through February 15, 2005. A schedule similar to the following might be helpful:
Step by Step Answer:
