Foundations of Finance (9th Edition) (Pearson Series in Finance)
9th Edition
ISBN: 9780134083285
Author: Arthur J. Keown, John D. Martin, J. William Petty
Publisher: PEARSON
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Chapter 13, Problem 14SP
a)
Summary Introduction
To determine: The financial statement by assuming that a 15% stock dividend is issued.
b)
Summary Introduction
To determine: The financial statement by assuming that a 2-for-1 stock split is declared.
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Beacon Corporation issued a 5 percent stock dividend on 39,500 shares of its $7 par common stock. At the time of the dividend, the
market value of the stock was $27 per share.
Required:
a. Compute the amount of the stock dividend.
b. Show the effects of the stock dividend on the financial statements using a horizontal statements model.
Complete this question by entering your answers in the tabs below.
Required A Required B
Compute the amount of the stock dividend.
Stock dividend
Beacon Corporation issued a 4 percent stock dividend on 37,500 shares of its $8 par common stock. At the time of the dividend, the
market value of the stock was $21 per share.
Required
a. Compute the amount of the stock dividend.
b. Show the effects of the stock dividend on the financial statements using a horizontal statements model.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Compute the amount of the stock dividend.
Slock dividend
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Chapter 13 Solutions
Foundations of Finance (9th Edition) (Pearson Series in Finance)
Ch. 13 - What is meant by the term dividend payout ratio?Ch. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Prob. 5RQCh. 13 - Prob. 6RQCh. 13 - Prob. 7RQCh. 13 - Prob. 8RQCh. 13 - Prob. 9RQCh. 13 - Prob. 10RQ
Ch. 13 - Prob. 3SPCh. 13 - (Dividend policy and stock prices) The issue as to...Ch. 13 - (Residual dividend policy) FarmCo, Inc. follows a...Ch. 13 - (Legal restrictions on dividend payments) Describe...Ch. 13 - (Practical considerations in setting dividend...Ch. 13 - Prob. 8SPCh. 13 - Prob. 9SPCh. 13 - Prob. 10SPCh. 13 - Prob. 11SPCh. 13 - Prob. 12SPCh. 13 - Prob. 13SPCh. 13 - Prob. 14SPCh. 13 - Prob. 15SPCh. 13 - Prob. 16SPCh. 13 - Prob. 1.1MCCh. 13 - The executive vice-president in charge of finance...Ch. 13 - Prob. 2.1MCCh. 13 - Prob. 2.2MCCh. 13 - Prob. 2.3MC
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- Beacon Corporation issued a 8 percent stock dividend on 35,000 shares of its $7 par common stock. At the time of the dividend, the market value of the stock was $30 per share. Required a. Compute the amount of the stock dividend. b. Show the effects of the stock dividend on the financial statements using a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). If an element was not affected by the event, leave the cell blank. Complete this question by entering your answers in the tabs below. Required A Required B Show the effects of the stock dividend on the financial statements using a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). If an element was not affected by the event, leave the cell blank. (Enter any decreases to account balances with a minus sign.)…arrow_forwardBeacon Corporation issued a 3 percent stock dividend on 37,000 shares of its $7 par common stock. At the time of the dividend, the market value of the stock was $26 per share. Required a. Compute the amount of the stock dividend. b. Show the effects of the stock dividend on the financial statements using a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). If an element was not affected by the event, leave the cell blank. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of the stock dividend. Stock dividend Required >arrow_forwardCalgate Company had the following shares outstanding and retained earnings at the end of the current year: Preferred shares, 4% (par value $15; outstanding, 10,300 shares) Common shares (outstanding, 33,000 shares) Retained earnings The board of directors is considering the distribution of a cash dividend to both groups of shareholders. No dividends were declared during the previous two years. Three independent cases are assumed: Case A: The preferred shares are non-cumulative; the total amount of dividends is $51,600. Case B: The preferred shares are cumulative; the total amount of dividends is $63,000. Case C: Same as case B, except the amount is $97,500. Required: 1. Compute the amount of dividends, in total and per share, that would be payable to each class of shareholders for each case. (Round "Per share" to 2 decimal places.) Case A: Total Per share Case B: Total Per share $ 154,500 615,000 296,000 Case C: Total Per share Preferred Shares Common Sharesarrow_forward
- Before preparing financial statements for the current year, the chief accountant for Pharoah Ltd. provided the following information regarding the accounting for dividends and stock splits: 1. Pharoah has 21,200, $4 noncumulative preferred shares issued. It paid the preferred shareholders the quarterly dividend, and recorded it as a debit to Dividends Expense and a credit to Cash. 2. A 5% stock dividend (1,000 shares) was declared on the common shares when the fair value per share was $12. To record the declaration, Retained Earnings was debited and Dividends Payable was credited. The shares have not been issued yet. 3. The company declared a 2-for-1 stock split on its 21,200, $4 noncumulative preferred shares. The average per share amount of the preferred shares before the split was $70. The split was recorded as a debit to Retained Earnings of $1,484,000 and a credit to Preferred Shares of $1,484,000. Determine if each of the above transactions was recorded…arrow_forwardBefore preparing financial statements for the current year, the chief accountant for Pharoah Ltd. provided the following information regarding the accounting for dividends and stock splits: 1. Pharoah has 21,200, $4 noncumulative preferred shares issued. It paid the preferred shareholders the quarterly dividend, and recorded it as a debit to Dividends Expense and a credit to Cash. 2. A 5% stock dividend (1,000 shares) was declared on the common shares when the fair value per share was $12. To record the declaration, Retained Earnings was debited and Dividends Payable was credited. The shares have not been issued yet. 3. The company declared a 2-for-1 stock split on its 21,200, $4 noncumulative preferred shares. The average per share amount of the preferred shares before the split was $70. The split was recorded as a debit to Retained Earnings of $1,484,000 and a credit to Preferred Shares of $1,484,000. Determine if each of the above transactions was recorded…arrow_forwardA company declares a 5% stock dividend. The debit to Retained Earnings is anamount equal toa. the market value of the shares to be issued.b. the par value of the shares to be issued.c. the book value of the shares to be issued.d. the excess of the market price over the original issue price of the shares to be issued.arrow_forward
- The table below shows the market performance for a share of common stock in a multi-national corporation. Date Price Dividends Paid January 24, 2005 P60.00 P5.00 January 24, 2006 63.00 5.50 January 24, 2007 67.00 6.05 January 24, 2008 74.00 7.49 a) If an investor purchased shares on January 24, 2005, determine the rate of return realized for a two year holding period. (Ans. 15%) b) the holding period is until January 24, 2008. (Ans. 17%)arrow_forwardThe market price of a share of common stock at the time of issuance was $19.50, while the market price of a preferred share of stock at the time of issuance was $32. The company paid $12.50 per share for its treasury stock. Required: Determine the missing amount in the stockholders' equity section of the balance sheet set forth below. (Input all amounts as positive values.) Stockholders' Equity Contributed Capital: Preferred Stock, $2.00 par value, authorized 1,000,000 shares; issued 300,000 shares Additional Paid-in Capital - Preferred Stock Common Stock, $3.00 par value, authorized 40,000,000 shares; issued 25,600,000 shares Additional Paid-in Capital - Common Stock Total Contributed Capital Retained Earnings Treasury Stock, at Cost (10,000 shares) Total Stockholders' Equity $ 0 305,683,000 305,683,000arrow_forwardThe balance sheet caption for common stock is the following: Common stock, $2 par value, 2,070,000 shares authorized, 1,310, 000 shares issued, 1,050,000 shares outstanding $? Required: a. Calculate the dollar amount that will be presented opposite this caption. b. Calculate the total amount of a cash dividend of $0.27 per share. c. What accounts for the difference between issued shares and outstanding shares? a. Amount b. Cash dividend c. Difference between issued shares and outstanding sharesarrow_forward
- Beacon Corporation issueda 4 percent stock dividend on 37,000 shares of its $8 par common stock. At the time of the dividend, the market value of the stock was S28 per share. Required a. Compute the amount of the stock dividend. b. Show the effects of the stock dividend on the financial statements using a horizontal statements model. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). If an element was not affected by the event, leave the cell blank. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of the stock dividend. Stock dividend Required B > Prev 18 of 20 Next >arrow_forwardDengararrow_forwardExplain how to calculate the after the stock dividend for the below problem. At the beginning of the year, the stockholders' equity section of the balance sheet of Solutions Corporation reflected the following: On February 1, the board of directors declared a 60 percent stock dividend to be issued April 30. The market value of the stock on February 1 was $15 per share. The market value of the stock on April 30 was $18 per share. For comparative purposes, prepare the Stockholders’ Equity section of the balance sheet immediately before the stock dividend and immediately after the stock dividend. Before Stock Dividend After Stock Dividend Contributed capital: Common stock $360,000 Additional paid-in capital 120,000 Retained earnings 580,000 Total stockholders’ equity $1,060,000 $0arrow_forward
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Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License