The equity sections from Atticus Group’s 2016 and 2017 year-end balance sheets follow. Stockholders Equity (December…
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Question “The equity sections from Atticus Group’s 2016 and 2017 year-end balance sheets follow. Stockholders Equity (December…”
Answer
Solution 1
At each cash dividend date, common shares are outstanding
Jan 5, 2019: 40000 shares
Apr 5 = Share Issued – Shares In Treasury Stock = 40000-3000 = 37000 Shares
July 5 = Share Issued – Shares In Treasury Stock = 40000-3000 = 37000 Shares
Oct 5 = Share Issued – Shares In Treasury Stock = 47400-3000 = 44400 Shares
Solution 2
Calculation of the dollar amount for each cash dividend
Jan 5: Outstanding shares * Dividend Per Share = 40000 * $0.50 = $2,000.
April 5 = 37000 *$0.50 = $18,500
July 5 = 37000*$0.50 = $18,500
Oct 5 = 44400*$0.50 = 222,200
Solution 3 :
Capitalization of the stock dividend = Number of shares issued = (337000*20%) * $12 = $88,800
Solution 4 :
Cost per share of treasury stocks purchased = Total cost for treasury stocks / Nos. of shares in treasury stocks
= $30,000 / 3000 = 10 per share
Solution 5
Retained earning 2017 = Retained Earnings in 2016 + Net Income 2017 – Cash dividend paid, Stock dividend
$400,000 = $320,000 + 2017 Net Income – ($20,000 + $18,500+ $18,500 + $22,200 – $88,800
2017 Net Income = $248,000
Conclusion
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