Problem no. 2Ray Corp. declared a 5% stock dividend on its 10,000 issued and outstanding shares of P2 par valuecommon stock, which had a fair value of P5 per share before the stock dividend was declared. This stockdividend was distributed 60 days after the declaration date.11. By what amount did Ray's current liabilities increase as a result of the stock dividend declaration?а. 0b. 500с. 1,000d. 2,500

5% stock dividend on 10000 shares @P2 par value = 5% x 20000 = P1000

Answered: Problem no. 2 Ray Corp. declared a 5%…

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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MC Qu. 11-153 A company has outstanding... A company has outstanding 13.50 million shares of $5.50 par common stock and 1.7 million shares of $4.70 par preferred stock. The preferred stock has an 9% dividend rate. The company declares $370,000 in total dividends for the year. Which of the following is correct if the preferred stockholders only have a current dividend preference? Multiple Choice O Preferred stockholders will receive the entire $370,000, and they must also be paid $53,000 before the end of the current accounting period. Common stockholders will receive nothing. Preferred stockholders will receive $33,300 or 9% of the total dividends. Common stockholders will receive the remaining $336,700. Preferred stockholders will receive the entire $370,000, and they must also be paid $53,000 sometime in the future before common stockholders will receive anything. Preferred stockholders will receive the entire $370,000, but will receive nothing more relating to this dividend…
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eBook Oct. 31. Declared semiannual dividends of $1.60 per share on the preferred stock and $0.13 per share on the common stock (before the stock dividend). In addition, a 2% common stock dividend was declared on the common stock outstanding. The fair market value of the common stock is estimated at $36. Oct. 31 Cash Dividends Cash Dividends Payable Oct. 31 Stock Dividends Stock Dividends Distributable 0 0 30,780 X 0 0 15,600 X Paid-In Capital in Excess of Par-Common Stock 0 Feedback Check My Work On the date of declaration of a cash dividend, it becomes legally binding. How do stock dividends affect stockholders' equity? Dec. 31. Paid the cash dividends and issued the certificates for the common stock dividend. Dec. 31 Cash Dividends Payable Cash Dec. 31 Stock Dividends Distributable Common Stock Feedback Check My Work What are the stockholders receiving? Feedback 75,600 X 0 0 ✓ 30,780 X 0 0 ✓
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LO: 13-08 Bloom's: Application 76. Sabas Company has 20,000 shares of $100 par, 2% cumulative preferred stock and 100,000 shares The following amounts were distributed as dividends of $50 par common stock. $10,000 45,000 90,000 Year 1: Year 2: Year 3: Determine the dividends per share for preferred and common stock for the first year. c. $0.50 and $0.00 d. $2.00 and $0.00 $0.50 and $0.10 b. $0.00 and $0.10 a. OBJ: LO: 13-03 Moderate DIF: C BUSPROG: Analytic PTS: 1 ANS: KEY: Bloom's: Application NAT:
question on exercise 16.4
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6-Feb: Declared a 5% stock dividend. The market value of the stock on that date was $25/share. Date Account DR CR 6-Feb Stock Dividend Correct $27,500 Correct Common Stock Dividend Distributable Correct Incorrect Paid-in Capital in Excess of Par Value-Common Stock Correct Incorrect

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