Question

QS 12-15 Computing financing cash flows LO P3 The following information is from Princeton Company's comparative balance sheets. At December 31 Common stock, $10 par value Paid-in capital in excess of par Retained earnings Current Prior Year Year $ 140,000 $ 132,000 599,000 358,000 345,500 319,500 The company's net income for the current year ended December 31 was $64,000. 1. Complete the T-accounts to calculate the cash received from the sale of its common stock during the current year. Common Stock, $10 Par Beg. bal. Issuance of common stock 132,000 8,000 End. bal. 140,000 Paid-in Capital in Excess of Par Beg. bal. Issuance of common stock 358,000 241,000 End. bal. 599,000 Cash received $ 249,000

Can you please help with this problem ASAP, and I'll give a thumbs up. I've tried putting -38,000 as credit in current year dividends but it's incorrect. Please show how you got your answer. Thank you.

Answer 1

Computation of dividend

Dividend should be calculated on par value of common stock ie $140,000

if the dividend rate is 10% or dividend per share declared is $1 then the total amount declared during the period is 140,000*10/100= 14,000.
Or

No of stock  multiplied by dividend declared during the period

= no of stocks = $140,000/$10= 14,000 common stocks

amount of dividend paid during the period is 14,000 common stocks *1= $14,000.

hope u understand the calculation., Actually I need more information regarding dividend that is the rate of dividend (rate at which dividend is declared here I assume it is 10% or $1,)