The number of common shares outstanding on each cash dividend date.

Question

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Answer 1

Question

Chapter 11, Problem 4PSB

1.

To determine

The number of common shares outstanding on each cash dividend date.

1.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the number of common shares outstanding on each cash dividend date as below.

Explanation of Solution

Required formula:

Issued shares are 17,000.

Treasury shares are 0.

Calculate the number of common shares outstanding as on January 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 0 \\ = 17, 000 \end{matrix}$

Hence, the number of shares outstanding as on January 5 is 17,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on April 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of shares outstanding as on April 5 is 16,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on August 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of common shares outstanding as on August 5 is 16,000.

Issued shares are 19,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on November 5.

$\begin{matrix} Number of outstanding shares = 19, 000 - 1, 000 \\ = 18, 000 \end{matrix}$

Hence, the number of common shares outstanding as on November 5 is 18,000.

Conclusion

Hence, the number of common shares outstanding on each cash dividend date is determined as above.

2.

To determine

The total dollar amount for each of the four cash dividends.

2.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the total dollar amount for each of the four cash dividends as shown below.

Explanation of Solution

Required formula:

$Total amount of cash dividend = (\begin{array}{l} Number of outstanding shares \\ \times Cash dividend per share \end{array})$

Number of outstanding shares is 17,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on February 15.

$\begin{matrix} Total amount of cash dividend = 17, 000 \times $ 0.40 \\ = $ 6, 800 \end{matrix}$

Hence, total dollar amount for the dividend as on February 15 is $6,800.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on May 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, total dollar amount for the dividend as on May 15 is $6,400.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on August 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, the total dollar amount for the dividend as on August 15 is $6,400.

Number of outstanding shares is 18,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on November 15.

$\begin{matrix} Total amount of cash dividend = 18, 000 \times $ 0.40 \\ = $ 7, 200 \end{matrix}$

Hence, the total dollar amount for the dividend as on November 15 is $7,200.

3.

To determine

To explain:

The amount of capitalization of retained earnings for the stock dividend.

3.

Expert Solution

Answer to Problem 4PSB

Solution:

The amount of capitalization of retained earnings for the stock dividend refers to that amount which is utilized from the retained earnings account to issue common stock account. This amount is $84,000.

Explanation of Solution

Calculate the amount of capitalization.

$\begin{matrix} Number of shares issued = Number of outsanding shares \times Stock dividend \\ = 16, 000 \times \frac{12.5}{100} \\ = 2, 000 \end{matrix}$

$\begin{matrix} Total amount capitalized = Number of shares issued \times Share price \\ = 2, 000 \times $ 42 \\ = $ 84, 000 \end{matrix}$

Hence, the total amount of capitalization is $84,000.

Conclusion

Hence, amount of capitalization of retained earnings for the stock dividend is $84,000.

4.

To determine

To compute:

The per share cost of the treasury stock purchased.

4.

Expert Solution

Answer to Problem 4PSB

Solution:

The per share cost of the treasury stock purchased is $40.

Explanation of Solution

Cost of treasury stock is $40,000.

Number of shares in treasury stock is 1,000.

Calculate the per share cost of the treasury stock as shown below.

$\begin{matrix} Per share cost of the treasury stock = \frac{Cost of treasury stock}{Number of shares in treasury stock} \\ = \frac{$ 40, 000}{1, 000} \\ = $ 40 \end{matrix}$

Hence, the per share cost of treasury stock is $40.

Conclusion

Hence, the per share cost of the treasury stock purchased is $40.

5.

To determine

To compute:

The net income earned by the company during the year 2016.

5.

Expert Solution

Answer to Problem 4PSB

Solution:

The net income earned by the company during the year 2016 is $136,000.

Explanation of Solution

Calculate the net income earned as shown below.

$\begin{matrix} Net income = (\begin{array}{l} Closing balance of retained earnings \\ - Opening balance of retained earnings \\ + Dividends paid during the year \end{array}) \\ = $ 295, 200 - $ 270, 000 + $ 110, 800 \\ = $ 136, 000 \end{matrix}$

Hence, the net income is $136,000.

Conclusion

Hence, the net income earned by the company during the year 2016 is $136,000.

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Answer 2

Question

Chapter 11, Problem 4PSB

1.

To determine

The number of common shares outstanding on each cash dividend date.

1.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the number of common shares outstanding on each cash dividend date as below.

Explanation of Solution

Required formula:

Issued shares are 17,000.

Treasury shares are 0.

Calculate the number of common shares outstanding as on January 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 0 \\ = 17, 000 \end{matrix}$

Hence, the number of shares outstanding as on January 5 is 17,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on April 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of shares outstanding as on April 5 is 16,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on August 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of common shares outstanding as on August 5 is 16,000.

Issued shares are 19,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on November 5.

$\begin{matrix} Number of outstanding shares = 19, 000 - 1, 000 \\ = 18, 000 \end{matrix}$

Hence, the number of common shares outstanding as on November 5 is 18,000.

Conclusion

Hence, the number of common shares outstanding on each cash dividend date is determined as above.

2.

To determine

The total dollar amount for each of the four cash dividends.

2.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the total dollar amount for each of the four cash dividends as shown below.

Explanation of Solution

Required formula:

$Total amount of cash dividend = (\begin{array}{l} Number of outstanding shares \\ \times Cash dividend per share \end{array})$

Number of outstanding shares is 17,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on February 15.

$\begin{matrix} Total amount of cash dividend = 17, 000 \times $ 0.40 \\ = $ 6, 800 \end{matrix}$

Hence, total dollar amount for the dividend as on February 15 is $6,800.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on May 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, total dollar amount for the dividend as on May 15 is $6,400.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on August 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, the total dollar amount for the dividend as on August 15 is $6,400.

Number of outstanding shares is 18,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on November 15.

$\begin{matrix} Total amount of cash dividend = 18, 000 \times $ 0.40 \\ = $ 7, 200 \end{matrix}$

Hence, the total dollar amount for the dividend as on November 15 is $7,200.

3.

To determine

To explain:

The amount of capitalization of retained earnings for the stock dividend.

3.

Expert Solution

Answer to Problem 4PSB

Solution:

The amount of capitalization of retained earnings for the stock dividend refers to that amount which is utilized from the retained earnings account to issue common stock account. This amount is $84,000.

Explanation of Solution

Calculate the amount of capitalization.

$\begin{matrix} Number of shares issued = Number of outsanding shares \times Stock dividend \\ = 16, 000 \times \frac{12.5}{100} \\ = 2, 000 \end{matrix}$

$\begin{matrix} Total amount capitalized = Number of shares issued \times Share price \\ = 2, 000 \times $ 42 \\ = $ 84, 000 \end{matrix}$

Hence, the total amount of capitalization is $84,000.

Conclusion

Hence, amount of capitalization of retained earnings for the stock dividend is $84,000.

4.

To determine

To compute:

The per share cost of the treasury stock purchased.

4.

Expert Solution

Answer to Problem 4PSB

Solution:

The per share cost of the treasury stock purchased is $40.

Explanation of Solution

Cost of treasury stock is $40,000.

Number of shares in treasury stock is 1,000.

Calculate the per share cost of the treasury stock as shown below.

$\begin{matrix} Per share cost of the treasury stock = \frac{Cost of treasury stock}{Number of shares in treasury stock} \\ = \frac{$ 40, 000}{1, 000} \\ = $ 40 \end{matrix}$

Hence, the per share cost of treasury stock is $40.

Conclusion

Hence, the per share cost of the treasury stock purchased is $40.

5.

To determine

To compute:

The net income earned by the company during the year 2016.

5.

Expert Solution

Answer to Problem 4PSB

Solution:

The net income earned by the company during the year 2016 is $136,000.

Explanation of Solution

Calculate the net income earned as shown below.

$\begin{matrix} Net income = (\begin{array}{l} Closing balance of retained earnings \\ - Opening balance of retained earnings \\ + Dividends paid during the year \end{array}) \\ = $ 295, 200 - $ 270, 000 + $ 110, 800 \\ = $ 136, 000 \end{matrix}$

Hence, the net income is $136,000.

Conclusion

Hence, the net income earned by the company during the year 2016 is $136,000.

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Answer 3

Question

Chapter 11, Problem 4PSB

1.

To determine

The number of common shares outstanding on each cash dividend date.

1.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the number of common shares outstanding on each cash dividend date as below.

Explanation of Solution

Required formula:

Issued shares are 17,000.

Treasury shares are 0.

Calculate the number of common shares outstanding as on January 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 0 \\ = 17, 000 \end{matrix}$

Hence, the number of shares outstanding as on January 5 is 17,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on April 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of shares outstanding as on April 5 is 16,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on August 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of common shares outstanding as on August 5 is 16,000.

Issued shares are 19,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on November 5.

$\begin{matrix} Number of outstanding shares = 19, 000 - 1, 000 \\ = 18, 000 \end{matrix}$

Hence, the number of common shares outstanding as on November 5 is 18,000.

Conclusion

Hence, the number of common shares outstanding on each cash dividend date is determined as above.

2.

To determine

The total dollar amount for each of the four cash dividends.

2.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the total dollar amount for each of the four cash dividends as shown below.

Explanation of Solution

Required formula:

$Total amount of cash dividend = (\begin{array}{l} Number of outstanding shares \\ \times Cash dividend per share \end{array})$

Number of outstanding shares is 17,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on February 15.

$\begin{matrix} Total amount of cash dividend = 17, 000 \times $ 0.40 \\ = $ 6, 800 \end{matrix}$

Hence, total dollar amount for the dividend as on February 15 is $6,800.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on May 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, total dollar amount for the dividend as on May 15 is $6,400.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on August 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, the total dollar amount for the dividend as on August 15 is $6,400.

Number of outstanding shares is 18,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on November 15.

$\begin{matrix} Total amount of cash dividend = 18, 000 \times $ 0.40 \\ = $ 7, 200 \end{matrix}$

Hence, the total dollar amount for the dividend as on November 15 is $7,200.

3.

To determine

To explain:

The amount of capitalization of retained earnings for the stock dividend.

3.

Expert Solution

Answer to Problem 4PSB

Solution:

The amount of capitalization of retained earnings for the stock dividend refers to that amount which is utilized from the retained earnings account to issue common stock account. This amount is $84,000.

Explanation of Solution

Calculate the amount of capitalization.

$\begin{matrix} Number of shares issued = Number of outsanding shares \times Stock dividend \\ = 16, 000 \times \frac{12.5}{100} \\ = 2, 000 \end{matrix}$

$\begin{matrix} Total amount capitalized = Number of shares issued \times Share price \\ = 2, 000 \times $ 42 \\ = $ 84, 000 \end{matrix}$

Hence, the total amount of capitalization is $84,000.

Conclusion

Hence, amount of capitalization of retained earnings for the stock dividend is $84,000.

4.

To determine

To compute:

The per share cost of the treasury stock purchased.

4.

Expert Solution

Answer to Problem 4PSB

Solution:

The per share cost of the treasury stock purchased is $40.

Explanation of Solution

Cost of treasury stock is $40,000.

Number of shares in treasury stock is 1,000.

Calculate the per share cost of the treasury stock as shown below.

$\begin{matrix} Per share cost of the treasury stock = \frac{Cost of treasury stock}{Number of shares in treasury stock} \\ = \frac{$ 40, 000}{1, 000} \\ = $ 40 \end{matrix}$

Hence, the per share cost of treasury stock is $40.

Conclusion

Hence, the per share cost of the treasury stock purchased is $40.

5.

To determine

To compute:

The net income earned by the company during the year 2016.

5.

Expert Solution

Answer to Problem 4PSB

Solution:

The net income earned by the company during the year 2016 is $136,000.

Explanation of Solution

Calculate the net income earned as shown below.

$\begin{matrix} Net income = (\begin{array}{l} Closing balance of retained earnings \\ - Opening balance of retained earnings \\ + Dividends paid during the year \end{array}) \\ = $ 295, 200 - $ 270, 000 + $ 110, 800 \\ = $ 136, 000 \end{matrix}$

Hence, the net income is $136,000.

Conclusion

Hence, the net income earned by the company during the year 2016 is $136,000.

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Answer 4

Question

Chapter 11, Problem 4PSB

1.

To determine

The number of common shares outstanding on each cash dividend date.

1.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the number of common shares outstanding on each cash dividend date as below.

Explanation of Solution

Required formula:

Issued shares are 17,000.

Treasury shares are 0.

Calculate the number of common shares outstanding as on January 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 0 \\ = 17, 000 \end{matrix}$

Hence, the number of shares outstanding as on January 5 is 17,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on April 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of shares outstanding as on April 5 is 16,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on August 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of common shares outstanding as on August 5 is 16,000.

Issued shares are 19,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on November 5.

$\begin{matrix} Number of outstanding shares = 19, 000 - 1, 000 \\ = 18, 000 \end{matrix}$

Hence, the number of common shares outstanding as on November 5 is 18,000.

Conclusion

Hence, the number of common shares outstanding on each cash dividend date is determined as above.

2.

To determine

The total dollar amount for each of the four cash dividends.

2.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the total dollar amount for each of the four cash dividends as shown below.

Explanation of Solution

Required formula:

$Total amount of cash dividend = (\begin{array}{l} Number of outstanding shares \\ \times Cash dividend per share \end{array})$

Number of outstanding shares is 17,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on February 15.

$\begin{matrix} Total amount of cash dividend = 17, 000 \times $ 0.40 \\ = $ 6, 800 \end{matrix}$

Hence, total dollar amount for the dividend as on February 15 is $6,800.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on May 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, total dollar amount for the dividend as on May 15 is $6,400.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on August 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, the total dollar amount for the dividend as on August 15 is $6,400.

Number of outstanding shares is 18,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on November 15.

$\begin{matrix} Total amount of cash dividend = 18, 000 \times $ 0.40 \\ = $ 7, 200 \end{matrix}$

Hence, the total dollar amount for the dividend as on November 15 is $7,200.

3.

To determine

To explain:

The amount of capitalization of retained earnings for the stock dividend.

3.

Expert Solution

Answer to Problem 4PSB

Solution:

The amount of capitalization of retained earnings for the stock dividend refers to that amount which is utilized from the retained earnings account to issue common stock account. This amount is $84,000.

Explanation of Solution

Calculate the amount of capitalization.

$\begin{matrix} Number of shares issued = Number of outsanding shares \times Stock dividend \\ = 16, 000 \times \frac{12.5}{100} \\ = 2, 000 \end{matrix}$

$\begin{matrix} Total amount capitalized = Number of shares issued \times Share price \\ = 2, 000 \times $ 42 \\ = $ 84, 000 \end{matrix}$

Hence, the total amount of capitalization is $84,000.

Conclusion

Hence, amount of capitalization of retained earnings for the stock dividend is $84,000.

4.

To determine

To compute:

The per share cost of the treasury stock purchased.

4.

Expert Solution

Answer to Problem 4PSB

Solution:

The per share cost of the treasury stock purchased is $40.

Explanation of Solution

Cost of treasury stock is $40,000.

Number of shares in treasury stock is 1,000.

Calculate the per share cost of the treasury stock as shown below.

$\begin{matrix} Per share cost of the treasury stock = \frac{Cost of treasury stock}{Number of shares in treasury stock} \\ = \frac{$ 40, 000}{1, 000} \\ = $ 40 \end{matrix}$

Hence, the per share cost of treasury stock is $40.

Conclusion

Hence, the per share cost of the treasury stock purchased is $40.

5.

To determine

To compute:

The net income earned by the company during the year 2016.

5.

Expert Solution

Answer to Problem 4PSB

Solution:

The net income earned by the company during the year 2016 is $136,000.

Explanation of Solution

Calculate the net income earned as shown below.

$\begin{matrix} Net income = (\begin{array}{l} Closing balance of retained earnings \\ - Opening balance of retained earnings \\ + Dividends paid during the year \end{array}) \\ = $ 295, 200 - $ 270, 000 + $ 110, 800 \\ = $ 136, 000 \end{matrix}$

Hence, the net income is $136,000.

Conclusion

Hence, the net income earned by the company during the year 2016 is $136,000.

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Answer 5

Chapter 11, Problem 4PSB

1.

To determine

The number of common shares outstanding on each cash dividend date.

1.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the number of common shares outstanding on each cash dividend date as below.

Explanation of Solution

Required formula:

Issued shares are 17,000.

Treasury shares are 0.

Calculate the number of common shares outstanding as on January 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 0 \\ = 17, 000 \end{matrix}$

Hence, the number of shares outstanding as on January 5 is 17,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on April 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of shares outstanding as on April 5 is 16,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on August 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of common shares outstanding as on August 5 is 16,000.

Issued shares are 19,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on November 5.

$\begin{matrix} Number of outstanding shares = 19, 000 - 1, 000 \\ = 18, 000 \end{matrix}$

Hence, the number of common shares outstanding as on November 5 is 18,000.

Conclusion

Hence, the number of common shares outstanding on each cash dividend date is determined as above.

2.

To determine

The total dollar amount for each of the four cash dividends.

2.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the total dollar amount for each of the four cash dividends as shown below.

Explanation of Solution

Required formula:

$Total amount of cash dividend = (\begin{array}{l} Number of outstanding shares \\ \times Cash dividend per share \end{array})$

Number of outstanding shares is 17,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on February 15.

$\begin{matrix} Total amount of cash dividend = 17, 000 \times $ 0.40 \\ = $ 6, 800 \end{matrix}$

Hence, total dollar amount for the dividend as on February 15 is $6,800.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on May 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, total dollar amount for the dividend as on May 15 is $6,400.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on August 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, the total dollar amount for the dividend as on August 15 is $6,400.

Number of outstanding shares is 18,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on November 15.

$\begin{matrix} Total amount of cash dividend = 18, 000 \times $ 0.40 \\ = $ 7, 200 \end{matrix}$

Hence, the total dollar amount for the dividend as on November 15 is $7,200.

3.

To determine

To explain:

The amount of capitalization of retained earnings for the stock dividend.

3.

Expert Solution

Answer to Problem 4PSB

Solution:

The amount of capitalization of retained earnings for the stock dividend refers to that amount which is utilized from the retained earnings account to issue common stock account. This amount is $84,000.

Explanation of Solution

Calculate the amount of capitalization.

$\begin{matrix} Number of shares issued = Number of outsanding shares \times Stock dividend \\ = 16, 000 \times \frac{12.5}{100} \\ = 2, 000 \end{matrix}$

$\begin{matrix} Total amount capitalized = Number of shares issued \times Share price \\ = 2, 000 \times $ 42 \\ = $ 84, 000 \end{matrix}$

Hence, the total amount of capitalization is $84,000.

Conclusion

Hence, amount of capitalization of retained earnings for the stock dividend is $84,000.

4.

To determine

To compute:

The per share cost of the treasury stock purchased.

4.

Expert Solution

Answer to Problem 4PSB

Solution:

The per share cost of the treasury stock purchased is $40.

Explanation of Solution

Cost of treasury stock is $40,000.

Number of shares in treasury stock is 1,000.

Calculate the per share cost of the treasury stock as shown below.

$\begin{matrix} Per share cost of the treasury stock = \frac{Cost of treasury stock}{Number of shares in treasury stock} \\ = \frac{$ 40, 000}{1, 000} \\ = $ 40 \end{matrix}$

Hence, the per share cost of treasury stock is $40.

Conclusion

Hence, the per share cost of the treasury stock purchased is $40.

5.

To determine

To compute:

The net income earned by the company during the year 2016.

5.

Expert Solution

Answer to Problem 4PSB

Solution:

The net income earned by the company during the year 2016 is $136,000.

Explanation of Solution

Calculate the net income earned as shown below.

$\begin{matrix} Net income = (\begin{array}{l} Closing balance of retained earnings \\ - Opening balance of retained earnings \\ + Dividends paid during the year \end{array}) \\ = $ 295, 200 - $ 270, 000 + $ 110, 800 \\ = $ 136, 000 \end{matrix}$

Hence, the net income is $136,000.

Conclusion

Hence, the net income earned by the company during the year 2016 is $136,000.

Answer 6

Chapter 11, Problem 4PSB

1.

To determine

The number of common shares outstanding on each cash dividend date.

1.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the number of common shares outstanding on each cash dividend date as below.

Explanation of Solution

Required formula:

Issued shares are 17,000.

Treasury shares are 0.

Calculate the number of common shares outstanding as on January 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 0 \\ = 17, 000 \end{matrix}$

Hence, the number of shares outstanding as on January 5 is 17,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on April 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of shares outstanding as on April 5 is 16,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on August 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of common shares outstanding as on August 5 is 16,000.

Issued shares are 19,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on November 5.

$\begin{matrix} Number of outstanding shares = 19, 000 - 1, 000 \\ = 18, 000 \end{matrix}$

Hence, the number of common shares outstanding as on November 5 is 18,000.

Conclusion

Hence, the number of common shares outstanding on each cash dividend date is determined as above.

Answer 7

Chapter 11, Problem 4PSB

1.

To determine

The number of common shares outstanding on each cash dividend date.

Answer 8

1.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the number of common shares outstanding on each cash dividend date as below.

Answer 9

1.

Expert Solution

Answer 10

1.

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Required formula:

Issued shares are 17,000.

Treasury shares are 0.

Calculate the number of common shares outstanding as on January 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 0 \\ = 17, 000 \end{matrix}$

Hence, the number of shares outstanding as on January 5 is 17,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on April 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of shares outstanding as on April 5 is 16,000.

Issued shares are 17,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on August 5.

$\begin{matrix} Number of outstanding shares = 17, 000 - 1, 000 \\ = 16, 000 \end{matrix}$

Hence, the number of common shares outstanding as on August 5 is 16,000.

Issued shares are 19,000.

Treasury shares are 1,000.

Calculate the number of common shares outstanding as on November 5.

$\begin{matrix} Number of outstanding shares = 19, 000 - 1, 000 \\ = 18, 000 \end{matrix}$

Hence, the number of common shares outstanding as on November 5 is 18,000.

Answer 13

Conclusion

Hence, the number of common shares outstanding on each cash dividend date is determined as above.

Answer 14

2.

To determine

The total dollar amount for each of the four cash dividends.

2.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the total dollar amount for each of the four cash dividends as shown below.

Explanation of Solution

Required formula:

$Total amount of cash dividend = (\begin{array}{l} Number of outstanding shares \\ \times Cash dividend per share \end{array})$

Number of outstanding shares is 17,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on February 15.

$\begin{matrix} Total amount of cash dividend = 17, 000 \times $ 0.40 \\ = $ 6, 800 \end{matrix}$

Hence, total dollar amount for the dividend as on February 15 is $6,800.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on May 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, total dollar amount for the dividend as on May 15 is $6,400.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on August 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, the total dollar amount for the dividend as on August 15 is $6,400.

Number of outstanding shares is 18,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on November 15.

$\begin{matrix} Total amount of cash dividend = 18, 000 \times $ 0.40 \\ = $ 7, 200 \end{matrix}$

Hence, the total dollar amount for the dividend as on November 15 is $7,200.

Answer 15

2.

To determine

The total dollar amount for each of the four cash dividends.

Answer 16

2.

Expert Solution

Answer to Problem 4PSB

Solution:

Calculate the total dollar amount for each of the four cash dividends as shown below.

Answer 17

2.

Expert Solution

Answer 18

2.

Expert Solution

Answer 19

Expert Solution

Answer 20

Explanation of Solution

Required formula:

$Total amount of cash dividend = (\begin{array}{l} Number of outstanding shares \\ \times Cash dividend per share \end{array})$

Number of outstanding shares is 17,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on February 15.

$\begin{matrix} Total amount of cash dividend = 17, 000 \times $ 0.40 \\ = $ 6, 800 \end{matrix}$

Hence, total dollar amount for the dividend as on February 15 is $6,800.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on May 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, total dollar amount for the dividend as on May 15 is $6,400.

Number of outstanding shares is 16,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on August 15.

$\begin{matrix} Total amount of cash dividend = 16, 000 \times $ 0.40 \\ = $ 6, 400 \end{matrix}$

Hence, the total dollar amount for the dividend as on August 15 is $6,400.

Number of outstanding shares is 18,000.

Cash dividend per share is $0.40

Calculate the total dollar amount for the dividend as on November 15.

$\begin{matrix} Total amount of cash dividend = 18, 000 \times $ 0.40 \\ = $ 7, 200 \end{matrix}$

Hence, the total dollar amount for the dividend as on November 15 is $7,200.

Answer 21

3.

To determine

To explain:

The amount of capitalization of retained earnings for the stock dividend.

3.

Expert Solution

Answer to Problem 4PSB

Solution:

The amount of capitalization of retained earnings for the stock dividend refers to that amount which is utilized from the retained earnings account to issue common stock account. This amount is $84,000.

Explanation of Solution

Calculate the amount of capitalization.

$\begin{matrix} Number of shares issued = Number of outsanding shares \times Stock dividend \\ = 16, 000 \times \frac{12.5}{100} \\ = 2, 000 \end{matrix}$

$\begin{matrix} Total amount capitalized = Number of shares issued \times Share price \\ = 2, 000 \times $ 42 \\ = $ 84, 000 \end{matrix}$

Hence, the total amount of capitalization is $84,000.

Conclusion

Hence, amount of capitalization of retained earnings for the stock dividend is $84,000.

Answer 22

3.

To determine

To explain:

The amount of capitalization of retained earnings for the stock dividend.

Answer 23

3.

Expert Solution

Answer to Problem 4PSB

Solution:

The amount of capitalization of retained earnings for the stock dividend refers to that amount which is utilized from the retained earnings account to issue common stock account. This amount is $84,000.

Answer 24

3.

Expert Solution

Answer 25

3.

Expert Solution

Answer 26

Expert Solution

Answer 27

Explanation of Solution

Calculate the amount of capitalization.

$\begin{matrix} Number of shares issued = Number of outsanding shares \times Stock dividend \\ = 16, 000 \times \frac{12.5}{100} \\ = 2, 000 \end{matrix}$

$\begin{matrix} Total amount capitalized = Number of shares issued \times Share price \\ = 2, 000 \times $ 42 \\ = $ 84, 000 \end{matrix}$

Hence, the total amount of capitalization is $84,000.

Answer 28

Conclusion

Hence, amount of capitalization of retained earnings for the stock dividend is $84,000.

Answer 29

4.

To determine

To compute:

The per share cost of the treasury stock purchased.

4.

Expert Solution

Answer to Problem 4PSB

Solution:

The per share cost of the treasury stock purchased is $40.

Explanation of Solution

Cost of treasury stock is $40,000.

Number of shares in treasury stock is 1,000.

Calculate the per share cost of the treasury stock as shown below.

$\begin{matrix} Per share cost of the treasury stock = \frac{Cost of treasury stock}{Number of shares in treasury stock} \\ = \frac{$ 40, 000}{1, 000} \\ = $ 40 \end{matrix}$

Hence, the per share cost of treasury stock is $40.

Conclusion

Hence, the per share cost of the treasury stock purchased is $40.

Answer 30

4.

To determine

To compute:

The per share cost of the treasury stock purchased.

Answer 31

4.

Expert Solution

Answer to Problem 4PSB

Solution:

The per share cost of the treasury stock purchased is $40.

Answer 32

4.

Expert Solution

Answer 33

4.

Expert Solution

Answer 34

Expert Solution

Answer 35

Explanation of Solution

Cost of treasury stock is $40,000.

Number of shares in treasury stock is 1,000.

Calculate the per share cost of the treasury stock as shown below.

$\begin{matrix} Per share cost of the treasury stock = \frac{Cost of treasury stock}{Number of shares in treasury stock} \\ = \frac{$ 40, 000}{1, 000} \\ = $ 40 \end{matrix}$

Hence, the per share cost of treasury stock is $40.

Answer 36

Conclusion

Hence, the per share cost of the treasury stock purchased is $40.

Answer 37

5.

To determine

To compute:

The net income earned by the company during the year 2016.

5.

Expert Solution

Answer to Problem 4PSB

Solution:

The net income earned by the company during the year 2016 is $136,000.

Explanation of Solution

Calculate the net income earned as shown below.

$\begin{matrix} Net income = (\begin{array}{l} Closing balance of retained earnings \\ - Opening balance of retained earnings \\ + Dividends paid during the year \end{array}) \\ = $ 295, 200 - $ 270, 000 + $ 110, 800 \\ = $ 136, 000 \end{matrix}$

Hence, the net income is $136,000.

Conclusion

Hence, the net income earned by the company during the year 2016 is $136,000.

Answer 38

5.

To determine

To compute:

The net income earned by the company during the year 2016.

Answer 39

5.

Expert Solution

Answer to Problem 4PSB

Solution:

The net income earned by the company during the year 2016 is $136,000.

Answer 40

5.

Expert Solution

Answer 41

5.

Expert Solution

Answer 42

Expert Solution

Answer 43

Explanation of Solution

Calculate the net income earned as shown below.

$\begin{matrix} Net income = (\begin{array}{l} Closing balance of retained earnings \\ - Opening balance of retained earnings \\ + Dividends paid during the year \end{array}) \\ = $ 295, 200 - $ 270, 000 + $ 110, 800 \\ = $ 136, 000 \end{matrix}$