Thus a holder of 100 share 5 percent stock dividend were declared 100 stock

Thus a holder of 100 share 5 percent stock dividend

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current shareholders receive additional shares on some proportional basis. Thus, a holder of 100 share 5 percent stock dividend were declared. 100% stock dividend or 2-for-1 split value per share. In the case of a stock dividend, there must be a transfer from retained earnings to cap 2-for-1 split accomplish exactly the same thing; hence, investors may choose either one. The difference is largely one of accounting. In the case of a split , the firm simply increases the number
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ned. Thus, in a 3-for-1 split, each shareholder would g. Stock splits usually occur when the stock price is but at a slower rate than splits. In a stock dividend, es would receive 5 additional shares at no cost if a pital stock. For most firms, a 100 percent stock dividend and a r of shares and simultaneously reduces the par or stated
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Solution to Part a Number of Days sales outstanding =10*.4+40*.6 28 days Solution to Part b Average amount of sales =912500/365 2500 per day Solution to Part c Nominal Annual Cost for the persons who take the discount =(3/97)*(365/20) 56.44% Solution to Part d Nominal Annual Cost for the persons who do not take the discount =(3/97)*(365/30) 37.63% Solution to Part e DSO =10*.4+30*.6 22 days Average sales per day 2500 Average Receivables =2500*22 55000
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solution to part a & b Collection Schedule Collections Sales for the month of Sales July August September October May 180,000.00 27,000.00 June 180,000.00 135,000.00 27,000.00 July 360,000.00 36,000.00 270,000.00 54,000.00 August 540,000.00 54,000.00 405,000.00 81,000.00 September 720,000.00 72,000.00 540,000.00 October 360,000.00 36,000.00 November 360,000.00 December 90,000.00 198,000.00 351,000.00 531,000.00 657,000.00 Payment of Purchases and Wages June July August September Purchases & Wages 90,000.00 126,000.00 882,000.00 306,000.00 Payments (Prior month's purchase) 90,000.00 126,000.00 882,000.00 CASH BUDGET July August September Collections 198,000.00 351,000.00 531,000.00 Payments for purchases 90,000.00 126,000.00 882,000.00 General & Admin. Salaries 27,000.00 27,000.00 27,000.00 Lease Payments 9,000.00 9,000.00 9,000.00 Miscellaneous Expenses 2,700.00 2,700.00 2,700.00 Income tax Payment 63,000.00 New Design Studio Total Payments 128,700.00 164,700.00 983,700.00 Net cash gain/loss during the month 69,300.00 186,300.00 (452,700.00) Cash in the beginning of the month if no borrowings are done 132,000.00 201,300.00 387,600.00 Cumulative Cash: cash at start if no borrowing + gain - loss 201,300.00 387,600.00 (65,100.00) Target Cash Balance 90,000.00 90,000.00 90,000.00 Cumulative surplus cash or loans outstanding to maintain $90,000 target cash balance 111,300.00 297,600.00 (155,100.00) solution to part c Yes, this will affcet the cash budget substantially. Thi means that the collections are faster than the payments. Wh
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