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ABC Co has the following owners' equity accounts: Common stock, $1 par, 2,000,000 shares Preferred stock, $100, 4%, 10,000 shares Paid in capital in excess of par, CS Paid in capital in excess of par, PS Retained earnings Record the declaration and issuance of the following dividends: • $0.10/share cash dividend on the common stock $2,000,000 1,000,000 10,000,000 200,000 5,000,000 10% stock dividend on the common stock. Current stock price $13/share 50% stock dividend on the common stock Current stock price = $14/share

ABC Co has the following owners' equity accounts: Common stock, $1 par, 2,000,000 shares Preferred stock, $100, 4%, 10,000 shares Paid in capital in excess of par, CS Paid in capital in excess of par, PS Retained earnings Record the declaration and issuance of the following dividends: • $0.10/share cash dividend on the common stock $2,000,000 1,000,000 10,000,000 200,000 5,000,000 10% stock dividend on the common stock. Current stock price $13/share 50% stock dividend on the common stock Current stock price = $14/share

FINANCIAL ACCOUNTING
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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ABC Co has the following owners' equity accounts: Common stock, $1 par, 2,000,000 shares Preferred stock, $100, 4 %, 10,000 shares Paid in capital in excess of par, CS Paid in capital in excess of par, PS Retained earnings Record the declaration and issuance of the following dividends: $0.10/share cash dividend on the common stock . $2,000,000 1,000,000 10,000,000 200,000 5,000,000 . 10% stock dividend on the common stock. Current stock price $13/share 50% stock dividend on the common stock Current stock price = $14/share Assume the preferred stock is cumulative, and that dividends were not paid last year. The firm wishes to distribute $100,000 in cash dividends. How would the dividends be split between the common and preferred? (no entry; just the allocation amounts). Assume the common stock has the following INDEPENDENT splits. After each split, what would be the new number of shares and the new par value per share? Split New # of shares New par value per share 2:1 5:2 10:1
Transcribed Image Text:ABC Co has the following owners' equity accounts: Common stock, $1 par, 2,000,000 shares Preferred stock, $100, 4 %, 10,000 shares Paid in capital in excess of par, CS Paid in capital in excess of par, PS Retained earnings Record the declaration and issuance of the following dividends: $0.10/share cash dividend on the common stock . $2,000,000 1,000,000 10,000,000 200,000 5,000,000 . 10% stock dividend on the common stock. Current stock price $13/share 50% stock dividend on the common stock Current stock price = $14/share Assume the preferred stock is cumulative, and that dividends were not paid last year. The firm wishes to distribute $100,000 in cash dividends. How would the dividends be split between the common and preferred? (no entry; just the allocation amounts). Assume the common stock has the following INDEPENDENT splits. After each split, what would be the new number of shares and the new par value per share? Split New # of shares New par value per share 2:1 5:2 10:1
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