Question

The equity sections for Atticus Group at the beginning of the year (January 1) and end of the year (December 31) follow.

Stockholders’ Equity (January 1)
Common stock—$4 par value, 100,000 shares authorized, 30,000 shares issued and outstanding	$	120,000
Paid-in capital in excess of par value, common stock		80,000
Retained earnings		320,000
Total stockholders’ equity	$	520,000

Stockholders’ Equity (December 31)
Common stock—$4 par value, 100,000 shares authorized, 35,400 shares issued, 3,000 shares in treasury	$	141,600
Paid-in capital in excess of par value, common stock		112,400
Retained earnings ($30,000 restricted by treasury stock)		420,000
		674,000
Less cost of treasury stock		(30,000	)
Total stockholders’ equity	$	644,000

The following transactions and events affected its equity during the year.

Jan.		5		Declared a $0.40 per share cash dividend, date of record January 10.
Mar.		20		Purchased treasury stock for cash.
Apr.		5		Declared a $0.40 per share cash dividend, date of record April 10.
July		5		Declared a $0.40 per share cash dividend, date of record July 10.
July		31		Declared a 20% stock dividend when the stock’s market value was $10 per share.
Aug.		14		Issued the stock dividend that was declared on July 31.
Oct.		5		Declared a $0.40 per share cash dividend, date of record October 10.

Required:
1. How many common shares are outstanding on each cash dividend date?
Jan 5th

April 5th

July 5th

October 5th

Answer 1

Answer

--Requirement 1

	05-Jan	05-Apr	05-Jul	05-Oct
Outstanding Common shares	30,000	27,000	27,000	32,400
Working Notes:	Existing as beginning balance	3,000 treasury stock purchased	[ no transaction affected no. of shares	[27000 x 20% stock dividend]
		[30000-3000]	between these dates]	[27000 + 5400]