The shareholders’ equity of Core Technologies Company on June 30, 2012, included
ID: 2465798 • Letter: T
Question
The shareholders’ equity of Core Technologies Company on June 30, 2012, included the following: Common stock, $1 par; authorized, 8 million shares
issued and outstanding, 4 million shares $ 4,000,000
Paid-in capital—excess of par 16,000,000
Retained earnings 17,000,000
On April 1, 2013, the board of directors of Core Technologies declared a 10% stock dividend on common shares, to be distributed on June 1. The market price of Core Technologies’ common stock was $38 on April 1, 2013, and $48 on June 1, 2013.
Required: Complete the below table to calculate the stock dividend
number of outstanding shares =
stock dividend percentage=
number of shares to be issued=
value of stock dividend=
(2)
The shareholders’ equity of WBL Industries includes the items shown below. The board of directors of WBL declared cash dividends of $8 million, $17 million, and $170 million in its first three years of operation—2013, 2014, and 2015, respectively.
Determine the amount of dividends to be paid to preferred and common shareholders in each of the three years, assuming that the preferred stock is cumulative and nonparticipating. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)
total cash dividend paid paid to preffered paid to common divident
in
arrears
2013 8 ? ? ?
2014 17 ? ? ?
2015 170 ? ? ?
total 195 ? ?
The shareholders’ equity of WBL Industries includes the items shown below. The board of directors of WBL declared cash dividends of $8 million, $17 million, and $170 million in its first three years of operation—2013, 2014, and 2015, respectively.
Explanation / Answer
(1) number of outstanding shares :
Outstanding shares in beginning =4000000 shares
stock dividend percentage = 10%
number of shares to be issued
4000000 *10% = 400000 shares
value of stock dividend = (400000 *$38) = $15200000
(1.April,2013 delcared at $38 price)
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