If a firm has retained earnings of $3.7 million, a common shares account of $5.7 million, and additional paid-in capital of $11.4 million,how would these accounts change in response to a 10 percent stock dividend? Assume market value of equity is equal to book valueof equity. (Enter your answers in dollars not in millions. Input all amounts as positive values. Indicate the direction of the effect byselecting "increase," "decrease," or "no change" from the drop-down menu.)Retained earningsCommon stockAdditional paid-in capitaldecreaseincreaseincreasetototo

The stock dividend can be defined as a payment of dividends by issuing additional shares of common…

Answered: If a firm has retained earnings of $3.7…

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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Firm L had net assets at the end of the year of $415,000. The only items affecting stockholders' equity during the year were net income of $76,000 and dividends of $46,000. Required: Calculate Firm L's average stockholders' equity and return on equity (ROE). Choose Addend: Choose Numerator: + 1 Average Stockholders' Equity 1 Choose Addend: /Choose Denominator: Return on Equity 11 = Average Stockholders' Equity Average stockholders' Equity Return on Equity Return on Equity Check my work
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For each transaction, indicate the change, if any, in total assets and total equity. If equity changes, indicate whether the change was reflected as a component of net income, or directly within the stockholders' equity portion of the balance sheet. Remember that the change in total assets must agree with the change in total equity. How would I complete the table?
Neumann Company computed earnings per share as follows. Net incomeCommon shares outstanding at year-endNet incomeCommon shares outstanding at year-end Neumann has a simple capital structure. What possible errors might the company have made in the computation? Explain.
A company had additions to retained earnings for the year just ended of Br. 275,000. The firm paid out Br. 150,000 in cash dividends from current earnings, and it has ending total equity of Br. 6 million. If the firm currently has 125,000 shares of common stock outstanding, what are earnings per share? Dividends per share? Book value per share? If the stock currently sells for Br. 95 per share, what is the market-to-book ratio? And, the price-earnings ratio?
If a company receives $12,600 from a stockholder, the effect on the accounting equation would be: Multiple Choice Assets decrease $12,600 and equity decreases $12,600. Assets increase $12,600 and liabilities decrease $12,60. Assets increase $12,600 and liabilities increase $12,600, Liabilities increase $12,600 and equity decreases $12,600. Assets increase $12,600 and equity increases $12,600. Type here to search
Please show working for each question 1. In its most recent financial statements, Nessler Inc. reported $50 million of net income and $550 million of retained earnings. The previous retained earnings were $512 million. How much in dividends were paid to shareholders during the year? Assume that all dividends declared were actually paid. Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest dollar, if necessary. 2. Byron Books Inc. recently reported $6 million of net income. Its EBIT was $12.6 million, and its tax rate was 40%. What was its interest expense? (Hint: Write out the headings for an income statement, and then fill in the known values. Then divide $6 million of net income by (1 - T) = 0.6 to find the pretax income. The difference between EBIT and taxable income must be interest expense. Use this same procedure to complete similar problems.) Write out your answer completely. For example, 25 million should…
If a firm has retained earnings of $3.4 million, a common shares account of $5.4 million, and additional paid-in capital of $10.8 million, how would these accounts change in response to a 10 percent stock dividend? Assume market value of equity is equal to book value of equity. (Enter your answers in dollars not in millions. Input all amounts as positive values. Indicate the direction of the effect by selecting "increase," "decrease," or "no change" from the drop-down menu.)
Match (by letter) the following terms with their definitions. Each letter is used only once.Terms_____ 1. PE ratio._____ 2. Stockholders’ equity section of the balance sheet._____ 3. Accumulated deficit._____ 4. Growth stocks._____ 5. 100% stock dividend._____ 6. Statement of stockholders’ equity._____ 7. Treasury stock._____ 8. Value stocks._____ 9. Return on equity._____ 10. Retained earnings.Definitionsa. A debit balance in Retained Earnings.b. Priced high in relation to current earnings as investors expect future earnings to be higher.c. Effectively the same as a 2-for-1 stock split.d. The earnings not paid out in dividends.e. The stock price divided by earnings per share.f. Summarizes the changes in the balance in each stockholders’ equity account over a period of time.g. Priced low in relation to current earnings.h. Measures the ability of company management to generate earnings from the resources that owners provide.i. Shows the balance in each equity account at a point in…
What effect would the calculation performed have in terms of shareholder value? In other words, suppose the company’s goal is to maximize shareholder value. How will increasing its dividend per share by 1.75 support or inhibit that goal? Be sure to justify reasoning.

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