LO 8-7 Brief Exercise 8-7 Effect of stock dividends on financial statements Hernandez Corporation issued an 8 percent stock dividend on 40,000 shares of its $5 par common stock. At the time of the dividend, the market value of the stock was $10 per share. Required Show the effects of the stock dividend on the financial statements using a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). An example of a horizontal statements model is shown below: Event Balance Sheet Assets = Cash = Com. Stk. Income Statement Stk Equity + PIC Excess CS + Ret. Earn. Rev. - Exp. = Net Inc. Statement of Cash Flows
LO 8-7 Brief Exercise 8-7 Effect of stock dividends on financial statements Hernandez Corporation issued an 8 percent stock dividend on 40,000 shares of its $5 par common stock. At the time of the dividend, the market value of the stock was $10 per share. Required Show the effects of the stock dividend on the financial statements using a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). An example of a horizontal statements model is shown below: Event Balance Sheet Assets = Cash = Com. Stk. Income Statement Stk Equity + PIC Excess CS + Ret. Earn. Rev. - Exp. = Net Inc. Statement of Cash Flows
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:LO 8-7
Brief Exercise 8-7 Effect of stock dividends on financial statements
Hernandez Corporation issued an 8 percent stock dividend on 40,000 shares of its $5 par common stock. At the time of the dividend,
the market value of the stock was $10 per share.
Required
Show the effects of the stock dividend on the financial statements using a horizontal statements model. In the Statement of Cash Flows
column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). An example of a
horizontal statements model is shown below:
Event
Balance Sheet
Stk Equity
Cash = Com. Stk. + PIC Excess CS + Ret. Earn. Rev. - Exp. = Net Inc.
Assets =
=
+
Income Statement
=
Statement of
Cash Flows
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