week 5 - 15-7a) At date of declaration (December 21,...

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Unformatted text preview: 15-7a) At date of declaration (December 21, 2007)6% on the preferred stockRetained earnings$12,000.00 CASH$12,000.00 Computatio:(6% x $200,000) = 12,000Prefferred stocks in arrearRetained earnings$12,000.00 Treasury stock$12,000.00 Computation: 1,500 shares X $8 share$12,000.00 $0.30 per share common stockRetained earning$89,190.00 Cash$89,190.00 Computation:Common stock as of 12/31/06$300,000.00 Less treasury stock$4,200.00 Total as of 12/31/06$295,800.00 Add paid in arrear$1,500.00 Total remaining for common$297,300.00 Common stock at .30/shareX0.30 Common stock cash dividend$89,190.00 b) YesPreffered stock in arrear$12,000.00 Current preferred stock$12,000.00 Common stock$88,740.00 Total stock to be paid$112,740.00 Balance$105,000.00 Plus net incom$77,000.00 Available cash$182,000.00 Less treasury stock$33,600.00 Available cash$148,400.00 Available > required148,400 > 112,740 a)Declare & Pay $0.50 per share cash dividendTotal AssetsDecrease cash (0.50*10,000 shares)$(5,000.00)Common stockno effectPaid in capital in excess of parno effectRetained earningDecrease (10,000*.50)$(5,000.00)Total stock holder equityDecrease$(5,000.00)b)Declare & issue a 10% stock dividend when market price is $14/share...
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week 5 - 15-7a) At date of declaration (December 21,...

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