Question

transactions during 2014 Summerborn Manufacturing, Co. completed the following 900 $ 100 5% Preferred Common80,000 6 16-Jan Declared a cash dividend on the 5%, $100 par noncumulative preferred stock (900 shares outstanding). Declared a So.30 per share dividend on the 80,000 shares of $6 par value common stock outstanding. The date of record is $0.30 15-Feb Paid the cash dividends. 0-Jun Split common stock 2-for-1 30-Jul Declared a 50% stock dividend on the common stock. The market value of the common: $ 15-Aug Distributed the stock dividend 26-Oct Purchased 1,000 shares of treasury stock at $13 per share. 9 $ 13 8-Nov Sold 500 shares of treasury stock for $15 per share $ 15 30-Nov Sold 300 shares of treasury stock for $8 per share Requirements Outstanding Common Shares 16-Jan Shares oustanding 10-Jun Stock Split 30-Jul Stock Dividend 26-Oct Purchase Treasury 8-Nov Sold Treasury 30-Noy Sold Treasuny

Answer 1

16th January	Par Value	Outststanding Common Shares	Total Value
Shares Outstanding	$                             6	80000	$                 4,80,000
(on 16 th January cash dividend is paid so no increase in shares)
10th June , Split Common Stock 1:1
2 shares allotted against 1 shares = 80,000 Shares X 2 Shares and par value = $ 6 / 2 = $ 3 Per Shares	$                             3	160000	$                 4,80,000
30 July Stock Dividend
Stock Dividend 160,000 Shares X 50% =          80,000 Shares
Total Shares = 160,000 Shares + 80,000 shares = 240,000	$                             3	240000	$                 7,20,000
26th Oct, Purchase treasury stock
Treasury stock is not part of the Sharehoder's Equity it can be reduced from the total outstanding shares
Outstanding shares = 240,000 Shares - 1,000 Shares =239,000 Shares	$                             3	239000	$                 7,17,000
8th November sold 500 Treasury Shares
When we sold the treasury shares than this sold shares are counted in outstanding shares
Outstanding shares = 239,000 Shares + 500 Shares = 239,500 Shares	$                             3	239500	$                 7,18,500
30th November sold 300 Treasury Shares
When we sold the treasury shares than this sold shares are counted in outstanding shares
Outstanding shares = 239,500 Shares + 300 Shares = 239,800 Shares	$                             3	239800	$                 7,19,400