Use the following to answer questions 13 - 17 KMC Corp.'s management is considering either a 100% stock dividend or a 2-for-1 stock split. Complete the following chart to assist in answering the following: After 2-for-1 Stock Split After 100% Before Stock Dividend Common stock, $0.50 par value $250,000 Additional paid-in capital 25,000,000 Total paid-in capital 25,250,000 Retained Earnings Total stockholders' equity 500,000 $25,750,000 Shares outstanding 500,000 Par value per share Share price S0.50 $250.00 13. $ After the 100% stock dividend what amount is in Total paid-in capital account? 14. $ After the 100% stock dividend what amount is in the retained earnings account? 15. $ After the 100% stock dividend what is the par value per share?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Use the following to answer questions 13 - 17
KMC Corp.'s management is considering either a 100%
stock dividend or a 2-for-1 stock split.
Complete the following chart to assist in answering the
following:
After 2-for-1
Stock Dividend Stock Split
After 100%
Before
Common stock, $0.50 par value $250,000
Additional paid-in capital
25,000,000
Total paid-in capital
25,250,000
Retained Earnings
500,000
Total stockholders' equity
$25,750,000
Shares outstanding
500,000
Par value per share
$0.50
Share price
$250.00
13.
$
what amount is in Total paid-in capital account?
After the 100% stock dividend
14.
After the 100% stock dividend
what amount is in the retained earnings account?
15.
2$
After the 100% stock dividend what
is the par value
per
share?
$
amount is in Total paid in capital account?
16.
After the 2-for-1 stock split what
$
the
17.
After the 2-for-1 stock split what is
share?
par value
per
Transcribed Image Text:Use the following to answer questions 13 - 17 KMC Corp.'s management is considering either a 100% stock dividend or a 2-for-1 stock split. Complete the following chart to assist in answering the following: After 2-for-1 Stock Dividend Stock Split After 100% Before Common stock, $0.50 par value $250,000 Additional paid-in capital 25,000,000 Total paid-in capital 25,250,000 Retained Earnings 500,000 Total stockholders' equity $25,750,000 Shares outstanding 500,000 Par value per share $0.50 Share price $250.00 13. $ what amount is in Total paid-in capital account? After the 100% stock dividend 14. After the 100% stock dividend what amount is in the retained earnings account? 15. 2$ After the 100% stock dividend what is the par value per share? $ amount is in Total paid in capital account? 16. After the 2-for-1 stock split what $ the 17. After the 2-for-1 stock split what is share? par value per
L.Mar Issue 5,000 additional shares of preferred stock for
s102.50 per share
1-Apr
Issue 100,000 additional shares of common stock for
Is25.00 реr share
Declare a cash dividend on both common and
1-Jun preferred stock of $0.75 per share to all stockholders
of record on June 15.
30-Jun Pay the cash dividend declared on June 1.
LAve Repurchase (buy) 50,000 shares of common treasury
stock for $26.00 per share
Lo Resell 40,000 shares of treasury stock purchased on
August 1 for $26.50 per share
31-Dec Net income for the year was $750,000
The beginning balances are shown below. Complete the
Stockholders' Equity
Statement of
using the above
information:
Additional
Total
Paid-in
Сapital
Stockholders'
Equity
Preferred
Common
Retained
Treasury
Stock
Stock
Stock
Earnings
Beginning balance
20XC
$1,000,000
$80,000
$7,600,000
$1,200,000
so
$9,880,000
Issuance of stock
Net income for the year
Less: Dividends
Purchase Treasury stock
Resell Treasury stock
Ending balance 20XC
6.
2$
When the shares were issued on
March 1, how much did additional paid in capital
increase?
On August 1st when the shares were
equity
7.
repurchased,
decrease?
how much
did stockholders'
8.
2$
On August 1st when the shares were
repurchased, how much did net income decrease?
9.
$
On October 1st when the 40,000
shares were resold, how much did additional paid in
capital change (if decrease put "-“ in front of the
number)?
On June 1st when the dividend
was declared, how much did retained earning decrease?
10.
$
11.
$
Compute ending retained earnings
on December 31st.
12.
$
Compute ending stockholders
equity on December 31st.
Transcribed Image Text:L.Mar Issue 5,000 additional shares of preferred stock for s102.50 per share 1-Apr Issue 100,000 additional shares of common stock for Is25.00 реr share Declare a cash dividend on both common and 1-Jun preferred stock of $0.75 per share to all stockholders of record on June 15. 30-Jun Pay the cash dividend declared on June 1. LAve Repurchase (buy) 50,000 shares of common treasury stock for $26.00 per share Lo Resell 40,000 shares of treasury stock purchased on August 1 for $26.50 per share 31-Dec Net income for the year was $750,000 The beginning balances are shown below. Complete the Stockholders' Equity Statement of using the above information: Additional Total Paid-in Сapital Stockholders' Equity Preferred Common Retained Treasury Stock Stock Stock Earnings Beginning balance 20XC $1,000,000 $80,000 $7,600,000 $1,200,000 so $9,880,000 Issuance of stock Net income for the year Less: Dividends Purchase Treasury stock Resell Treasury stock Ending balance 20XC 6. 2$ When the shares were issued on March 1, how much did additional paid in capital increase? On August 1st when the shares were equity 7. repurchased, decrease? how much did stockholders' 8. 2$ On August 1st when the shares were repurchased, how much did net income decrease? 9. $ On October 1st when the 40,000 shares were resold, how much did additional paid in capital change (if decrease put "-“ in front of the number)? On June 1st when the dividend was declared, how much did retained earning decrease? 10. $ 11. $ Compute ending retained earnings on December 31st. 12. $ Compute ending stockholders equity on December 31st.
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