Consider the following assumed transactions of BedfordBedford Corporation. Each
ID: 2579538 • Letter: C
Question
Consider the following assumed transactions of
BedfordBedford
Corporation. Each transaction is independent.
a.
b.
Payment of the cash dividend in (a).
c.
d.
e.
f.
g.
Requirement
Effect on total
stockholders' equity
Amount
a.
a.
Declaration of cash dividends of $82 million.b.
Payment of the cash dividend in (a).
c.
A 5% stock dividend. Before the dividend, 75 million shares of $1.00par common stock were outstanding; the market value was $15.07
at the time of the dividend.
d.
A 40% stock dividend. Before the dividend, 75million shares of $1.00
par common stock were outstanding; the market value was $18.50
at the time of the dividend.
e.
Purchase of 1,900shares of treasury stock (par value $1.00)
at $17.00
per share.
f.
Sale of 200 shares of the treasury stock for $18.00per share. Cost of the treasury stock was $17.00
per share.
g.
A 3-for-1 stock split. Prior to the split, 75million shares of $1.00par common stock were outstanding.
Requirement
Identify the effectsminusboth the direction and the dollar amount minusofthese assumed transactions on the total stockholders' equity of Bedford
Corporation. (Enter amounts in dollars. For example, enter 10 million as 10,000,000. For transactions that have no effect on total stockholders' equity, enter a "0" in the Amountcolumn.)
Effect on total
stockholders' equity
Amount
a.
Explanation / Answer
Effect on total
stockholders' equity
Amount
a.
Declaration of cash dividends of $82 million.
-
-82000000
B-
Payment of the cash dividend in (a).
0
0
C-
A 5% stock dividend. Before the dividend, 75 million shares of $1.00
0
0
par common stock were outstanding; the market value was $15.07
at the time of the dividend.
D-
A 40% stock dividend. Before the dividend, 75
0
0
million shares of $1.00
par common stock were outstanding; the market value was $18.50
at the time of the dividend.
E-
Purchase of 1,900
-
-32300
shares of treasury stock (par value $1.00)
at $17.00
per share.
F-
Sale of 200 shares of the treasury stock for $18.00
+
3600
per share. Cost of the treasury stock was $17.00
per share.
g-
A 3-for-1 stock split. Prior to the split, 75million shares of $1.00
0
0
par common stock were outstanding.
Effect on total
stockholders' equity
Amount
a.
Declaration of cash dividends of $82 million.
-
-82000000
B-
Payment of the cash dividend in (a).
0
0
C-
A 5% stock dividend. Before the dividend, 75 million shares of $1.00
0
0
par common stock were outstanding; the market value was $15.07
at the time of the dividend.
D-
A 40% stock dividend. Before the dividend, 75
0
0
million shares of $1.00
par common stock were outstanding; the market value was $18.50
at the time of the dividend.
E-
Purchase of 1,900
-
-32300
shares of treasury stock (par value $1.00)
at $17.00
per share.
F-
Sale of 200 shares of the treasury stock for $18.00
+
3600
per share. Cost of the treasury stock was $17.00
per share.
g-
A 3-for-1 stock split. Prior to the split, 75million shares of $1.00
0
0
par common stock were outstanding.
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