Problem no. 2Ray Corp. declared a 5% stock dividend on its 10,000 issued and outstanding shares of P2 par valuecommon stock, which had a fair value of P5 per share before the stock dividend was declared. This stockdividend was distributed 60 days after the declaration date.11. By what amount did Ray's current liabilities increase as a result of the stock dividend declaration?а. 0b. 500с. 1,000d. 2,500

5% stock dividend on 10000 shares @P2 par value = 5% x 20000 = P1000

Answered: Problem no. 2 Ray Corp. declared a 5%…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 3RE

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Alert Companys shareholders equity prior to any of the following events is as follows: The company is considering the following alternative items: 1. An 8% stock dividend on the common stock when it is selling for 30 per share. 2. A 30% stock dividend on the common stock when it is selling for 32 per share. 3. A special stock dividend to common shareholders consisting of 1 share of preferred stock for every 100 shares of common stock. The preferred stock and common stock are selling for 123 and 31 per share, respectively. 4. A 2-for-1 stock split on the common stock, reducing the par value to 5 per share (assume the same date for declaration and issuance). The market price is 30 per share on the common stock. 5. A property dividend to common shareholders consisting of 100 bonds issued by West Company. These bonds are carried on the Alert Company books as an available-for sale investment at a fair value of 48,000 (which is also its cost); it has a current value of 54,000. 6. A cash dividend, consisting of a normal dividend and a liquidating dividend, on both the preferred and the common stock. The 10% preferred dividend includes a 2% liquidating dividend, and the 2.30 per share common dividend includes a 0.30 per share liquidating dividend (separate liquidating dividend contra accounts should be used). Required: For each of the preceding alternative items: 1. Record (a) the journal entry at the date of declaration and (b) the journal entry at the date of issuance. 2. Compute the balances in the shareholders equity accounts immediately after the issuance (any gains or losses are to be reflected in the retained earnings balance; ignore income taxes).
Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows: a. Issued 15,000 shares of 20 par common stock at 30, receiving cash. b. Issued 4, 000 shares of 80 par preferred 5% stock at 100, receiving cash. c. Issued 500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. d. Declared a quarterly dividend of 0.50 per share on common stock and 1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. e. Paid the cash dividends declared in (d). f. Purchased 7,500 shares of Solstice Corp. at 40 per share, plus a 150 brokerage commission. The investment is classified as an available-for-sale investment. g. Purchased 8,000 shares of treasury common stock at 33 per share. h. Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for 24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. i. Declared a 1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued. j. Paid the cash dividends to the preferred stockholders. k. Received 27,500 dividend from Pinkberry Co. investment in (h). l. Purchased 90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of 37 5. The bonds are classified as a held-to-maturity long -term investment. m. Sold, at 38 per share, 2,600 shares of treasury common stock purchased in (g). n. Received a dividend of 0 .60 per share from the Solstice Corp. investment in (f). o. Sold 1,000 shares of Solstice Corp. at 45, including commission. p. Recorded the payment of semiannual interest on the bonds issue d in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method . q. Accrued interest for three months on the Dream Inc. bonds purchased in (I). r. Pinkberry Co. recorded total earnings of 240 ,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. s. The fair value for Solstice Corp. stock was 39. 02 per share on December 31, 2016. The investment is adjusted to fair value , using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments h ad a beginning balance of zero. Instructions 1. Journalize the selected transactions. 2. After all of the transaction s for the year ended December 31, 201 6, had been poste d [including the transactions recorded in part (1) and all adjusting entries), the data that follows were taken from the records of Equinox Products Inc. a. Prepare a multiple-step in come statement for the year ended December 31, 201 6, concluding with earnings per share . In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were 100,000. ( Round earnings per share to the nearest cent.) b. Prepare a retained earnings statement for the year ended December 31, 20 6. c. Prepare a balance sheet in report form as of December 31, 2016.
h. XYZ Company declared a 2% stock dividend on common stock ($3 par). (Pretend there are 10,000 shares of common stock outstanding and that the current market value of a share of a common stock on that date was $20). DATE Debit Credit X/X i. XYZ Company distributed the stock dividends from (h). DATE Debit Credit X/X
The following information relates to X, Y, and Z as at 30 June 2021 Stock Share price Number of shares X 10 2,000,000 Y 15 6,000,000 Z 20 10,000,000 During the year the following activities occurred; A two for one stock split on Y Payment of 10% dividend on Z. It can be assumed that the entire dividend paid will be reinvested in shares of Z limited. On 30 June 2022 the stock prices of X, Y and Z were sh 12, sh 10 and sh 20 respectively. Required; New index value given that the beginning value index is 100. Explain how secondary markets benefit investors. State and explain the main risks faced by financial institutions in the course of conduct of their business.
XYZ Company declared a 2% stock dividend on common stock ($3 par). (Pretend there are 10,000 shares of common stock outstanding and that the current market value of a share of a common stock on that date was $20). DATE Debit Credit X/X
At the beginning of the current year, Ace Company declared 10% stock dividend. The market price of the entity’s 30,000 outstanding shares of20 par value was P90 per share on that date. The stock dividend was distributed on July 1, when the market price was P100 per share. What amount should be credited to share premium for the stock dividend? a. 210,000 b. 240,000 c. 270,000 d. 300,000
XYZ Company declared a 2% stock dividend on common stock ($5 par). (Pretend there are 100,000 shares of common stock outstanding and that the current market value of a share of common stock on that date was $7.) Journalize this transaction. DATE Debit Credit X/X XYZ Company distributed the stock dividends from (h). Journalize this transaction. DATE Debit Credit X/X
The shareholders’ equity of Raven Company is as shown: RAVEN COMPANY Partial Balance Sheet 1 Common stock, $10 par $300,000.00 2 Additional paid-in capital on common stock 200,000.00 3 Retained earnings 200,000.00 4 $700,000.00 Raven is considering the declaration and issuance of a stock dividend at a time when the market price is $20 per share Prepare the appropriate journal entries for the declaration on December 1 and payment or distribution of the dividend on December 15, assuming the board of directors recommends a 40% stock dividend.
The company with the common equity accounts shownhere has declared a 15 percent stock dividend when the market value of its stock is$43 per share. What effects on the equity accounts will the distribution of the stockdividend have?Common stock ($1 par value)Capital surplusRetained earningsTotal owners’ equity$ 385,000846,0003,720,800$4,951,800
On 3 October 20X6, Corbin Ltd issued 100,000 5% redeemable GHS 1 preference shares. These shares are redeemable on 3 October 20Y1. In accordance with IAS 32 Financial Instruments: Presentation, how will these shares and their related dividend be shown in Corbin Ltd’s financial statements for the year ended 31 December 20X6? Shares Dividend A Non-current liabilities Income statement B Non-current liabilities Statement of changes in equity C Equity Income statement D Equity Statement of changes in equity
Morrison Corporation had the following common stock record during the current calendar year: Outstanding-January 1 Additional shares issued 3/31 Distributed a 10% stock dividend on 6/30 Additional shares issued 9/30 What is the number of shares to be used in computing basic EPS? Multiple Choce 2.110.000 2.326.550 2,110,000 111,000 2,440.325 111,000
The company declared a 2% common stock dividend on December 1, and would like you to compute the following pieces of missing information. The market value of the common shares is $26 on December 1, and is $32 on the actual distribution date of the stock, December 31. Total paid-in capital before the stock dividend $fill in the blank 2ba5a8fc300a076_1 Total retained earnings before the stock dividend fill in the blank 2ba5a8fc300a076_2 Total stockholders’ equity before the stock dividend $fill in the blank 2ba5a8fc300a076_3 Total paid-in capital after the stock dividend $fill in the blank 2ba5a8fc300a076_4 Total retained earnings after the stock dividend fill in the blank 2ba5a8fc300a076_5 Total stockholders’ equity after the stock dividend $fill in the blank 2ba5a8fc300a076_6

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