4. Common, Inc. has just issued a 10% stock dividend. The following information was available just prior to issuing the dividend. Market value of common shares: $25 each Number of common shares outstanding: 100,000 Par value of common shares: $10 per share Retained earnings: $2,500,000 What is the proper balance in Retained Earnings immediately after issuing the stock dividend? a. $2,250,000 b. $2,600,000 c. $2,500,000 d. $2,400,000 e. $2,750,000
4. Common, Inc. has just issued a 10% stock dividend. The following information was available just prior to issuing the dividend. Market value of common shares: $25 each Number of common shares outstanding: 100,000 Par value of common shares: $10 per share Retained earnings: $2,500,000 What is the proper balance in Retained Earnings immediately after issuing the stock dividend? a. $2,250,000 b. $2,600,000 c. $2,500,000 d. $2,400,000 e. $2,750,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Answer both
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Transcribed Image Text:4. Common, Inc. has just issued a 10% stock dividend. The following information was available just
prior to issuing the dividend.
Market value of common shares: $25 each
Number of common shares outstanding: 100,000
Par value of common shares: $10 per share
Retained earnings: $2,500,000
What is the proper balance in Retained Earnings immediately after issuing the stock
dividend?
a. $2,250,000
b. $2,600,000
$2,500,000
C.
d. $2,400,000
e. $2,750,000
Transcribed Image Text:2. Allstate Inc. has 10,000 shares of $8, no par value, cumulative preferred shares and 100,000
shares of no par value common shares outstanding at December 31, 2016. If the board of
directors declares a $60,000 dividend, the
a. Preferred shareholders will receive 1/10th of what common shareholders will receive.
b. Preferred shareholders will receive the entire $60,000.
c. $60,000 will be held as restricted retained earnings and paid out at some future date.
d. Preferred shareholders will receive $30,000 and the common shareholders will receive
$30,000.
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