The stockholders’ equity of TVX Company at the beginning of the day on February

Question

The stockholders’ equity of TVX Company at the beginning of the day on February 5 follows:

1. On February 5, the directors declare a 18% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $47 per share on February 5 before the stock dividend. The stock’s market value is $40 per share on February 28.

2.

One stockholder owned 950 shares on February 5 before the dividend. Compute the book value per share and total book value of this stockholder’s shares immediately before and after the stock dividend of February 5. (Round your "Book value per share" answers to 2 decimal places. Round "Total book value of shares" to the nearest whole dollar.)

Compute the total market value of the investor’s shares in part 2 as of February 5 and February 28.

      

      

The stockholders’ equity of TVX Company at the beginning of the day on February 5 follows:

  Common stock—$5 par value, 150,000 shares authorized,
    62,000 shares issued and   outstanding $ 310,000   Paid-in capital in excess of par value, common stock 525,000   Retained earnings 675,000   Total stockholders’ equity $ 1,510,000

Explanation / Answer

Solution:-

1.

Explanation:-

Feb. 5

2.

* 950 Shares * 114% = 1,083 shares

3.

Please Rate or comment if you have any doubt regarding this solution.

Date General journal Debit Credit Feb 05 Retained earnings 407,960 Common stock dividend distributable 43,400 Paid-in-capital in excess of par value, common stock 364,560 Feb 28 Common stock dividend distributable 43,400 Common stock, $5 par value 43,400

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