Homework Session 21 Spring 2010 - Homework Session 21...

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P11–1. 1. Shares authorized (given). ......................................................................... 200,000 Shares issued ($2,125,000 ÷ $17). ........................................................... 125,000 Shares outstanding (125,000 – 3,000). ...................................................... 122,000 2. Contributed capital in excess of par: $2,125,000 – (125,000 shares issued x $10 par) = $875,000. 3. Earnings per share: $118,000 ÷ 122,000 shares = $.97 (rounded). 4. Dividend per share: $73,200 ÷ 122,000 shares = $0.60. 5. Treasury stock: Stockholders’ equity, as a deduction in the amount of 3,000 shares x $20 cost = $60,000. 6. Stock split, 100%: Par value per share after the split, $10 ÷ 2 = $5. Outstanding shares before split (per 1 above), 122,000 x 2 = 244,000 shares outstanding after the split. 7. Entry for the stock split—None, because the total par value amount before and after the split is the same; retained earnings are not capitalized in a stock split. 8. Entry for stock dividend (capitalize retained earnings for market value of $21 per share): Retained earnings (122,000 shares x 10% x $21) (-SE). ...... 256,200 Common stock (122,000 shares x 10% x $10) (+SE). ....... 122,000
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This note was uploaded on 04/25/2010 for the course HADM 1121 taught by Professor Dittman during the Spring '07 term at Cornell University (Engineering School).

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Homework Session 21 Spring 2010 - Homework Session 21...

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