Preparing a Statementof Stockholders’Equity and EvaluatingDividend Policy
The following account balances were selected from the records of TEAC Corporation at December 31, 2011, after all adjusting entries were completed:
Common stock (par 520: authorized 100,000 shares. issued 34,000 shares. of which 2,000 shares are held as treasury stock) | $680.000 |
Capital in excess of par | 163.000 |
Dividends declared and paid in 2011 | 16.000 |
Retained earnings. January 1. 2011 | 75.000 |
Treasury stock at cost (2.000 shares) | 25.000 |
Net income for the year was $30.000. Restriction on retained earning equal to the cost of treasury stock held is required by law in this state. The stock price is currently 522.29 per share.
Required:
1. Prepare the Stockholders’ Equity section of the balance sheet at December 31. 2011.
2. Compute and evaluate the dividend yield ratio. Determine the number of shares of stock that received dividends.
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