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Unformatted text preview: $117,600 c) The owners would have designated the preferred shares as non-voting in order to maintain control over the corporation. That is, in order to maintain the initial shared control structure resulting from the original common share issuance to the owners (each with 25% control). 11-31 a. Preferred Common Total 2006 750,000 2007 750,000 2008 750,000 2,750,000 5,000,000 b. Total dividend / # shares = $2,750,000/750,000 = $3.67 c. The entry for the stock dividend would be Stock dividends declared (SE) 4,425,000 Common shares (SE) 4,425,000 (750,000 x 10% x $59) This would reduce the company’s retained earnings and increase the share capital by increasing the common shares. The total dollar amount of shareholders equity would remain unchanged. d. The company could use the issuance of shares instead of cash as a way of satisfying their shareholders request for dividends while conserving their cash....
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- Summer '09