2017 Dividend Schedule As of December 31, 2016 1st Q 10% stock dividend Retained
ID: 2588555 • Letter: 2
Question
2017 Dividend Schedule
As of December 31, 2016
1st Q
10% stock dividend
Retained Earnings
575,000
2nd Q
15% Stock dividend
Common Stock, $5 Par
75,000
3rd Q
none
Paid in Capital excess of par
150,000
4th Q
$1 Cash Dividend
Total Stockholder's Equity
800,000
The 2017 net income was 150,000.
What is the year end stockholder’s equity at the end of 2017?
How many shares are outstanding at the end of 2017?
2017 Dividend Schedule
As of December 31, 2016
1st Q
10% stock dividend
Retained Earnings
575,000
2nd Q
15% Stock dividend
Common Stock, $5 Par
75,000
3rd Q
none
Paid in Capital excess of par
150,000
4th Q
$1 Cash Dividend
Total Stockholder's Equity
800,000
Explanation / Answer
Par Value per Share $5, Total No of Shares = 75000/5=15000 shares,
The additional paid in capital= 150000, SO, the extra price per share is $10
Therefore Fair Value of Share is $5+$10=$15
Qtr 1 :Consolidated entry for stock dividend declaration and distribution
10 % Stock Dividend = 15000 Shares * 10%= 1500 shares
1500 shares X 15$ = 22500
Retained Earning A/c 22500
To Common Stock (1500X5) 7500
To Additional Paid Up Cap(BF) 15000
Qtr 2: 15% stock Dividend= 15% of (15000+1500)shares = 2475 shares
2475 shares X 15$= 37125
Consolidated entry for stock dividend declaration and distribution
Retained Earnings A/c Dr 37125
To Common Stock (2475 Shares X 5$) 12375
TO Additional Paid Up Cap (BF) 24750
3rd Qtr- NA
4th Qtr-
Before calc of div,
Total No of O/s shares in of 2017 = 15000 + 1500 + 2475 shares= 18975 shares
Journal Entry for Dividend
Retained Earning (18975X1$) 18975
TO DIvidend Payable /Cash 18975
Now, Calc for Stockholder's equity for the year ending 2017 is
Common Stock (18975 X 5$) = 94875-------a
Additional Paid up capital (18975X 10$)= 189750----b
Retained Earning = 575000+150000-22500-37125-18975=646400----c
Therefore Answer is a+b+c= 931025
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.