On October 31, Sunland Corporation's liabilities totalled $232,000. Its shareholders' equity consisted of common shares with acarrying amount of $936,000, with 93,600 common shares issued and retained earnings with a carrying amount of $276,800. Sunlandis considering the following three courses of action: (1) paying a $0.75 cash dividend, (2) declaring a 10% stock dividend, or (3)effecting a 3-for-1 stock split. The current market price for its common shares is $15 per share.Complete the following tabular summary of the effects of the alternative actions on Sunland's shareholders' equity and number ofcommon shares.Total assetsTotal liabilitiesCommon sharesRetained earningsTotal shareholders' equityTotal liabilities and shareholders' equityNumber of common sharesBeforeAction$1,444,800$232,000936,000276,8001,212,800$1,444,80093,600$$(1)After Cash Dividend(2)After Stock DividendtAtAtAAFTER STOCKSPLIT

Corporate Actions include Dividend, Stock Dividend and Stock Split.The dividend is a certain…

Answered: On October 31, Sunland Corporation's…

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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The outstanding capital stock of Metlock Corporation consists of 1,900 shares of $100 par value, 9% preferred, and 5,400 shares of $50 par value common. Assuming that the company has retained earnings of $84,500, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions. a. The preferred stock is noncumulative and nonparticipating. (Round answers to O decimal places, e.g. 38,487.) $ $ Preferred b. The preferred stock is cumulative and nonparticipating. (Round answers to O decimal places, e.g. 38,487.) $ Preferred $ Preferred $ Common c. The preferred stock is cumulative and participating. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to O decimal places, e.g. 38,487.) $ Common Common
The outstanding share capital of KTI Corporation consists of 2,950 preferred shares and 7,000 common shayes for which $280,000 was received. The preferred shares carry a dividend of $7 per share and have $100 stated value. Instructions: Assuming that the company has retained earnings of $95,000 that is to be entirely paid out in dividends and that preferred dividends were not paid during the two years preceding the current year, state how much each class of shares should receive under each of the following conditions. a. The preferred shares are cumulative and non-participating. b. The preferred shares are cumulative and participating. Do not round intermediate calculations but round answer to nearest dollar.
The charter of a corporation provides for the issuance of 114,964 shares of common stock. Assume that 44,309 shares were originally issued and 3,848 were subsequently reacquired. What is the amount of cash dividends to be paid if a $2-per-share dividend is declared?
25 )
On October 31, the stockholders' equity section of Blossom Corporation's balance sheet consists of common stock $659,200 and retained earnings $877,000. Blossom is considering the following two courses of action: (1) declaring a 5% stock dividend on the 82.400 $8 par value shares outstanding or (2) effecting a 2-for-1 stock split that will reduce par value to $4 per share. The current market price is $15 per share. Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares. Stockholders' equity Paid-in capital Retained earnings Total stockholders equity $ Outstanding shares Before Action $ $ After Stock Dividend $ After Stock Split
The outstanding capital stock of Oriole Corporation consists of 1,900 shares of $100 par value, 8% preferred, and 4,700 shares of $50 par value common. Assuming that the company has retained earnings of $89,500, all of which is to be paid out in dividends, and that preferred dividends were not paid during the 2 years preceding the current year, state how much each class of stock should receive under each of the following conditions. a. The preferred stock is noncumulative and nonparticipating. (Round answers to O decimal places, e.g. 38,487.) Preferred b. The preferred stock is cumulative and nonparticipating. (Round answers to O decimal places, e.g. 38,487.) EA Preferred Common c. The preferred stock is cumulative and participating. (Round the rate of participation to 4 decimal places, e.g.1.4278%. Round answers to O decimal places, e.g. 38,487.) Preferred LA Common Common
Blossom Corporation has outstanding 150,000 common shares that were issued at $12 per share. The balances at January 1, 2023, were $19 million in its Retained Earnings account: $4.10 million in its Contributed Surplus account, and $0.90 million in its Accumulated Other Comprehensive Income account. During 2023, Blossom's net income was $3,300,000 and comprehensive income was $3,450,000. A cash dividend of $0.80 per share was declared and paid on June 30, 2023, and a 6% stock dividend was declared at the fair value of the shares and distributed to shareholders of record at the close of business on December 31, 2023. You have been asked to give advice on how to properly account for the stock dividend. The existing company shares are traded on a national stock exchange. The shares' market price per share has been as follows: Oct. 31, 2023 Nov. 30, 2023 Dec. 31, 2023 Average price over the two-month period (a) $31 34 Account Titles and Explanation 38 35 Prepare a journal entry to record…
As of the end of Year 1, the shareholders’ equity of Philip Corporation consisted of: Common stock, 80,100 shares at $1 par $ 80,100 Paid-in capital—excess of par 168,210 Retained earnings 121,000 At the beginning of Year 2, the company repurchased and retired 1,100 shares at $8.10 per share. Prepare the appropriate journal entry for the repurchase and retirement of the shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field
Healthy Life Co. is an HMO for businesses in the Fresno area. The following account balances appear on Healthy Life’s balance sheet: Common stock (800,000 shares authorized; 460,000 shares issued), $4 par, $1,840,000; Paid-in capital in excess of par—common stock, $800,000; and Retained earnings, $31,940,000. The board of directors declared a 2% stock dividend when the market price of the stock was $12 a share. Healthy Life reported no income or loss for the current year. Required: a. Journalize the entries to record (1) the declaration of the dividend, capitalizing an amount equal to market value, and (2) the issuance of the stock certificates. b. Determine the following amounts before the stock dividend was declared: (1) total paid-in capital, (2) total retained earnings, and (3) total stockholders’ equity. c. Determine the following amounts after the stock dividend was declared and closing entries were recorded at the end of the year: (1) total paid-in capital, (2) total retained…
The annual report for Sneer Corporation disclosed that the company declared and paid preferred dividends in the amount of $140.000 in the current year. It also declared and paid dividends on common stock in the amount of $2.40 per share. During the current year, Sneer had 1 milion common shares authorized; 340,000 shares had been issued; and 136,000 shares were in treasury stock. The opening balance in Retained Earnings was $840,000 and Net Income for the current year was $340,000 Required: 1. Prepare journal entries to record the declaration, and payment, of dividends on (a) preferred and (b) common stock. 2. Using the information given above, prepare a statement of retained earnings for the year ended December 31 3. Prepare a journal entry to close the dividends account.

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