Question

The owners' equity accounts for Masterson International are shown here: $ 45,000 157,000 603,000 Common stock ($1 par value) Capital surplus Retained earnings Skipped Total owners' equity $805,000 Assume the company's stock currently sells for $42 per share and a stock dividend of 10 percent is declared. a-1.How many new shares will be distributed? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) New shares issued

Answer 1

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PE EPS, STOCK DIVIDEND - Microsoft Excel (Product Activation Failed) View Add-Ins - 2x Dr Wrap Text General r a Merge & Center - $ 48. File Home Insert Page Layout Formulas Data Review % Cut Calibri 11 AA = = = E Copy Paste BI U DA S Format Painter Clipboard Font V430 U V W X Insert Delete Format % Number Conditional Format Formatting as Table Styles Cell Styles Σ AutoSum : A Fill Sort & Clear Filter Editing Find & Select Alignment Cells Y Z AA AB AC AD AE AF AG AH A 411 common stock no of common shares = 45000/1 = 45000 45000 412 413 414 415 416 417 418 419 420 10% stock dividend so common shares will increase by 10% x 45000 = 4500 a-1 new shares issued new shares outstanding 4500 49500 (45000 + 4500] 421 now current price = 42 per share par value = 1, therefore the capital surplus will be 42 -1 = 41 so common stock will increase by = 4500 X 1 = capital surplus will increase by = 4500 X 41 = 4500 184500 a -2 422 423 424 425 426 427 428 429 430 431 H Rea common stock ($ 1 par value) capital surplus retained earnings total owner's equity 49500 [49500 X 1] 341500 [157000 + 184500] 414000 [603000 - 4500 - 184500] 805000 STOCK DIV NAV HEDGE FUND ME EV PE EPS DIV ABNORMAL deberk MARGIN MONEY marginal tax PB ROPI APV ROSS HIGH LOW TARGET PRICE ferences 1 -_- price quote EVA MVAI BO 120% 9 . * . 40 ... B ENG 01-12-2019

- 2x AH A 439 b-1 PE EPS, STOCK DIVIDEND - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View Add-Ins % Cut Σ AutoSum : A Calibri 11 AA = = = Dr Wrap Text General Ea Copy Fill Paste BI U DA S r a Merge & Center - $ % 48. Conditional Format Cell Format Painter Insert Delete Format Sort & Find & Formatting as Table Styles Clear Filter Select Clipboard Font Alignment Number Styles Cells Editing AA453 for U V W X Y Z AA AB AC AD AE AF AG 434 435 common stock 45000 436 no of common shares = 45000/1 = 45000 437 438 25% stock dividend so common shares will increase by 25% x 45000 = 11250 440 441 new shares issued 11250 442 new shares outstanding 56250 [45000 + 11250) 443 now current price = 42 per share 445 par value = 1, therefore the capital surplus will be 42 -1 = 41 446 so common stock will increase by = 11250 X 1 = 11250 447 capital surplus will increase by = 11250 X 41 = 461250 448 449 b-2 common stock ($ 1 par value) 56250 (56250 X 1] capital surplus 618250 (157000 + 461250] 451 retained earnings 130500 [603000 - 11250 - 461250] total owner's equity 805000 453 454 H HIGH LOW TARGET PRICE STOCK DIV NAV HEDGE FUND ME EV PE EPS DIV ABNORMAL deberk MARGIN MONEY marginal tax PB ROPI APV ROSS price quote EVA MVAI Rea 1 ferences B0 120% D O 9 * 444 450 452 0 + ENG 01-12-2019