2. Chillox has 5,000 shares of stock outstanding with a par value of $1.00 per share and a marketprice of $19 per share. The balance sheet shows$61,000$22,500$66,500CashDebt$52,500Other Current AssetsCommon stock$5,000Net Fixed AssetsCapital in excess of par$60,000Retained earnings$32,500Total Assets$150,000Total Liabilities and Equity$150.000The firm just announced a 10% stock dividend.Required:a) Show the changes in Balance Sheet after the stock dividend.b) Show the changes in Balance Sheet if the firm announces a $3 regular cash dividend instead ofthe stock dividend.c) Will you prefer paying cash dividends or will you use the cash instead for stock repurchase?Justify your decision.

As per U.S. GAAP, there are 2 types of stock dividends: Small stock dividend: When the % of…

Answered: 2. Chillox has 5,000 shares of stock…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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9. Home Co. reported the following amounts in the stockholders’ equity section of its balance sheet dated Dec. 31, 2021: Preference share capital (P150 par value, 20,000 shares) 3,000,000 Ordinary share capital (P37.50 par value, 100,000 shares) 3,750,000 Share premium reserve 6,000,000 Accumulated profits 4,500,000 Treasury stock, at cost (5,000 ordinary shares) 250,000 On January 2, 2022, Home sold 20,000 additional shares of ordinary share for P90 per share. Late in 2022, it was learned that because of mathematical error, an overstatement of depreciation expense by P375,000 had occurred in 2015. Home reported net income of P825,000 for 2022. Home declared cash dividends of P150,000 on preference share and P450,000 on the ordinary…
A firm has 750 bonds outstanding that are selling for $989 each, 2,500 shares of preferred stock with a market price of $47 per share, and 30,000 shares of common stock valued at $56 per share. What weight should be assigned to the common stock when computing the firm's weighted average cost of capital? a. 54.00% b. 55.45% c. 66.16% d. 62.08% e. 47.11%
The equity account for company A is Common shares ($1.00 par value)- 10,000,000 Additional Paid in capital- $50,000,000 Retained Earnings- 125,000,000 Treasury shares at cost -1,000,000 Net common equity- 186,000,000 Company had Earnings of $21,000,000 this hear and they have 12,000,000 shares outstanding and will pay a dividend of $1.00 per share. What are the Retained earnings for the year and the new value of Retained earnings account?
In December 31, 2009, Brave Corporation reported the following: Cash P22,000 Treasury Stock (P8 per share, at cost) (16,000) Retained earnings 130,000 Common stock, par P5; (authorized 100,000 shares) 400,000 Share Premium ? Total contributed capital 540,000 The stockholders' equity section of the balance sheet, should report a total stockholder's equity of: The stockholders' equity section of the balance sheet, should report a share premium of:
Pettygrove Company had 1,500,000 shares of $10 par value common stock outstanding. The amount of additional paid-in capital is $7,500,000, and Retained Earnings is $2,250,000. The company issues a 2-for-1 stock split. The market price of the stock is $13. What is the balance in the Common Stock account after this issuance? Multiple Choice $30,000,000 $34,500,000 $15,000,000 $22,500,000
If Dakota Company issues 1,500 shares of $6 par common stock for $75,000, O Common Stock will be credited for $75,000 O Paid-In Capital in Excess of Par will be credited for $9,000 Paid-In Capital in Excess of Par will be credited for $66,000 O Cash will be debited for S66,000
Thunder Yard's total stockholders' Equity is P5,600.000, comprised of the following: • P1,000,000 in 8% cumulative preferred stock consisting of shares of P100 par value • P1,800,000 in Ordinary Shares of P5 par value per share issued at P8 • P1,600,000 in additional Paid in capital P1,200,000 in retained earnings There is a Dividend in Arrears for 2 years 1. Compute for Number of shares of Preferred Stock 2. Compute for Additional Paid In Capital: Preferred Stock 3. Book Value Per Share Ordinary Shares (Round-off Answer to two decimal places)
The balance sheet for Chevelle Corp. is shown here in market value terms. There are 9,000 shares of stock outstanding. Market Value Balance Sheet Cash $43,700 Fixed assets 310,000 Total $353,700 Equity $353,700 Total $353,700 Instead of a dividend of $1.40 per share, the company has announced a share repurchase of $12,600 worth of stock. How many shares will be outstanding after the repurchase? (Do not round intermediate calculations and round your final answer to 2 decimal places. What will the price per share be after the repurchase? (Do not round intermediate calculations and round your final answer to 2 decimal places.
A company declared and distributed an 8% dividend on 800,000 shares of $5 par value common stock outstanding. Market price per common share on this date was $25. What is the debit to Retained Earnings for the value of the stock dividend? O $64,000 O $320,000 O $1,600,000 O $40,000,000 79°F Rair
Based on the following information, what is the market weight of common stock/market weight of preferred stock/market weight of bonds (long-term debt) Given: Source of capital Common Stock Preferred stock 155,000 shares Bonds ($1000 par value) 190,000 bonds 31%/5%/64% 60%/9%/31% # shares or bonds outstanding 1.9 million shares 35%/12%/53% 85%/7%/8% Mkt Price $48.00/share $102/share $985 per bond

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