A 150000 b 36000

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: stock is currently selling for $40 per share, which means that the company could distribute an additional 7,200 common shares ($288,000 ÷ $40 per share) in a stock dividend. Since the 7,200 shares represent only 14.4% of the 50,000 shares already outstanding, the distribution of the 7,200 shares would be considered an ordinary stock dividend. c. Cash Dividend Cash Dividend (–E) 25,000 Cash (–) 25,000 Declared and paid cash dividend. Stock Dividend Stock Dividend (–E) 288,000 Common Stock (+SE) 72,000 Additional Paid­In Capital, Common Stock (+SE) 216,000 Declared and issued stock dividend. d. If Cotter Company sold its marketable securities, it would receive the market value of $50 per share. Since Cotter Company owns 2,500 shares, it would receive $125,000. Combining this $125,000 with the $25,000 of cash already on hand would allow Cotter Company to declare and pay a cash dividend of $150,000. P12–7 a. Stevenson Enterprises would make the following journal entry for the stock...
View Full Document

This homework help was uploaded on 03/03/2014 for the course ACCT 5053 taught by Professor Staff during the Fall '08 term at Oklahoma State.

Ask a homework question - tutors are online