Hernandez Company has 560,000 shares of $10 par value common stock outstanding. During the year, Hernandez declared a 15% stock dividend when the market price of the stock was $30 per share. Four months later Hernandez declared a $.50 per share cash dividend. As a result of the dividends declared during the year, retained earnings decreased by
Hernandez Company has 560,000 shares of $10 par value common stock outstanding. During the year, Hernandez declared a 15% stock dividend when the market price of the stock was $30 per share. Four months later Hernandez declared a $.50 per share cash dividend. As a result of the dividends declared during the year, retained earnings decreased by
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter12: Statement Of Stockholders’ Equity (stockeq)
Section: Chapter Questions
Problem 4R: The following selected transactions and events occurred during 2013: a. Issued 200 shares of...
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![Hernandez Company has 560,000 shares of $10 par value common stock outstanding.
During the year, Hernandez declared a 15% stock dividend when the market price of
the stock was $30 per share. Four months later Hernandez declared a $.50 per share
cash dividend. As a result of the dividends declared during the year, retained earnings
decreased by
O $462,000.
$ 420,000.
$2,842,000.
$1,260.000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F81ee3775-40e9-4f25-b683-ca8b48e3cd62%2F34564d43-ff0a-420f-8288-7d74f8c72f8f%2F6uv9lo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Hernandez Company has 560,000 shares of $10 par value common stock outstanding.
During the year, Hernandez declared a 15% stock dividend when the market price of
the stock was $30 per share. Four months later Hernandez declared a $.50 per share
cash dividend. As a result of the dividends declared during the year, retained earnings
decreased by
O $462,000.
$ 420,000.
$2,842,000.
$1,260.000.
Expert Solution
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Step 1
Shares outstanding = 560,000 shares
Stock dividend = 15% = 560,000 * 15% = 84,000 shares
Stock dividend in amount = 84,000 shares * $30 = $2,520,000
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