The stockholders\' equity section of Culver Corporation\'s balance sheet consist
ID: 2530544 • Letter: T
Question
The stockholders' equity section of Culver Corporation's balance sheet consists of common stock $8 par $1,040,000 and retained earnings $500,000 A 10% stock dildend 13,000 shares s declared when the market price per share is S18. (a) Show the before-and-after effects of the dividend on the components of stockholders' equity. Before Dividend After Dividend Nat Income (Loss Total Paid-in Copitsl Net Income(Loss) (b) Show the before-and-after effects of the dividend on the shares outstanding. Before Dividend After Dividend Outstanding sharesExplanation / Answer
Answer:
1
Before
Devidend
After
Devidend
Calculation
Stockholders’ equity
Paid-in capita
Common stock, $8 par
1,040,000
1,144,000
1040,000+ 13000*8
Paid in capital in excess of
par value—common stock
130000
13000* (18-8)
Total paid-in capital
1,040,000
1,274,000
Retained earnings
500,000
266,000
500,000-13000*18
Total stockholders’ equity
1,540,000
1,540,000
2
Before
Devidend
After
Devidend
Outstanding shares
130000
143000
(1040,000/8)
(130,000+13000)
Before
Devidend
After
Devidend
Calculation
Stockholders’ equity
Paid-in capita
Common stock, $8 par
1,040,000
1,144,000
1040,000+ 13000*8
Paid in capital in excess of
par value—common stock
130000
13000* (18-8)
Total paid-in capital
1,040,000
1,274,000
Retained earnings
500,000
266,000
500,000-13000*18
Total stockholders’ equity
1,540,000
1,540,000
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