{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Lecture Notes - Assign 8

Outstanding shares of 6 100par preferred stock are

Info iconThis preview shows pages 2–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Outstanding shares of 6% $100par preferred stock are 1,000 shares and 20,000 shares of $2par common stock. First: Preferred stock: 6%*$100=$6. $6*1,000shares=$6,000. Second: Common stock: Receives the remainder. $50,000 – 6,000 = $44,000. Dividend per share: $6 preferred, $2.2 common ($44,000/20,000shares) Cash dividend: 1. Date of declaration: Dr Cash dividend Cr Dividend payable 2. Date of record: No entry 3. Date of payment Dr Cash dividend Cr Cash Stockholder’s Equity Paid-in Capital Preferred Stock XXXXX Excess of issue price over par XXXXX XXXXX Common Stock XXXXX Excess of issue price over par XXXXX XXXXX Total Paid-in Capital XXXXX Retained Earnings XXXXX Total XXXXX Deduct treasury stock (XXXXX) Total Stockholders' Equity XXXXX
Background image of page 2

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Stock Split Increases the number of shares, does not change the equity section. No journal entry E.g. 10,000 shares of $18par common stock with a current market value of $52. A 3 for 1 stock split. o Shares after the split: 10,000 * 3 = 30,000 shares o Par value after the split: $18par / 3 = $6par o Market value after the split: $52 / 3 = $17.3333 Market value before split: 10,000shares * $52 = $520,000 Market value after the split: 30,000shares * $17.3333 = $520,000
Background image of page 3
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page2 / 4

Outstanding shares of 6 100par preferred stock are 1000...

This preview shows document pages 2 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online