Question

Oh May . о comment wloc h y 2017 creased by $400.000 decreased decreased by $20.000 did not change by 5.400 OOO stockholders B.On December 31, 2017, the stockholders the red 10.000 Shares Common stock par value to Issued and outstanding 0 000 shares Additional paid in capital Retained earnings Total stockholders' equity On March 31, 2018. Arndt declan issued when the fair value of 2018. And sustained a are news S 50 000 118.000 104.000 not declared a 10% stock dividend and accordingly 000 additional shares were ered e d a ner loss of 532.000 Th an Arndt retained earnings as of March 31. nded March 2018, show would be a $135,800 b. $143,000 CS144.800 d. $152,000 comber 31, 2017 and 2018, Plank Corp. had outstanding 4.000 shares of $100 par value 8% cumulative preferred stock and 20.000 shares of S10 par value common stock At December 31, 2017 ends in arrears on the preferred stock were $16.000 Cash dividends declared in 2018 totaled $60,000. What amounts were payable on each class of stock? Preferred Stock Common Stock $32,000 $28.000 b. $44,000 $ 16,000 c. $48.000 $12,000 $60,000 $0 Ye Co. had 300,000 shares of common stock issued and outstanding at December 31, 2017. No non stock was issued during 2015. On January 1, 2018, Didde issued 200,000 shares of nvertible preferred stock. During 2018, Didde declared and paid $75,000 cash dividends on the on stock and $60,000 on the preferred stock. Net income for the year ended December 31 55,000. What should be Didde's 2018 earnings per common share?

Answer 1

7

Stock dividend is distribution of profit by company by way of issuing shares to shareholders

Stock dividend are declared from retained earnings. Stock dividend would increase the value of common stock and decrease retained earnings by same amount.

Thus, in total stock dividend would have no impact of stockholder's equity

Thus, stockholder's equity would not change with stock dividend

Thus, correct answer is option (d)

8

Ending retained earnings

Beginning retained earnings - Net loss - Stock dividend

Ending retained earnings

184000-32000-(900*18)

Ending retained earnings

184000-32000-16200

Ending retained earnings

$135,800

Thus, correct answer is option (a)

9

In case of cumulative preferred shares preferred sharehoders would be paid current year dividend plus arrears in dividend before any dividend is paid to common shareholders

Preferred dividend

Current (4000*100*8%)

$32,000

Arrears in dividend

$16,000

Total preferred dividend

$48,000

Common dividend

60000-48000

Common dividend

$12,000

Thus, correct answer is option (c )