Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed belowj The equity sections from Atticus Group's 2016 and 2017 year-end balance sheets follow Stockholders' Equity (December 31, 2816) Common stock-$5 par value, 1ee,eee shares authorized, 3,8ee shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders equity 15e,e0e 118,e00 360,eae 628,80e Stockholders' Equity (December 31, 2017) Common stock-$s par value, 1ee,eee shares $175,eee 135,8ee 488,820 718,8a8 (3e,8ee) $680,ee0 authorized, 35,98e shares issued, 5,8 shares in treasury Paid-in capital in excess of par value, common stock Retained earnings ($38,80e restricted by treasury stock) Less cost of treasury stock Total stockholders' equity The following transactions and events affected its equity during year 2017 Jan. 5 Declared a $0.68 per $hare cash dividend, date of record January 19 Mar. 20 Purchased treasury stock for cash Apr. 5 Declared a $0.68 per share cash dividend, date of record April le July 5Declared a $0.60 per share cash dividend, date of record July 1e July 31 Declared a 28% stock dividend when the stock's market value was $10 per share Aug. 14 Issued the stock dividend that was declared on July 31 Oct. 5 Declared a $0.68 per share cash dividend, date of record October 1e Required: 1. How many common shares are outstanding on each cash dividend date? Jan. Outstanding common shares 35,000 30,000 30,000 36,000

Explanation / Answer

Solution:

1.

Jan. 5                Apr. 5             July 5               Oct. 5

Outstanding common shares                       30,000           25,000            25,000           30,000

Explanation:

Outstanding common shares                 Jan. 5            Apr. 5           July 5          Oct. 5

Beginning balance                              30,000           30,000            30,000        30,000

Less treasury stock (Mar. 20)                                   (5,000)          (5,000)        (5,000)

Plus dividend shares (July 31)*                                                                           5,000*

Outstanding shares                            30,000           25,000            25,000           30,000

*(20% x 25,000)

2.

Jan. 5            Apr. 5             July 5          Oct. 5

Cash dividend amounts                  18,000         15,000           15,000        18,000

Explanation:

Cash dividend amounts                      Jan. 5               Apr. 5         July 5 Oct. 5

Outstanding shares                            30,000           25,000            25,000           30,000

Dividend per share 0.60             0.60              0.60              0.60

Total dividend 18,000         15,000           15,000        18,000

4.

Total amount paid = $30000

Shares purchased = 5000

Cost per share = $30,000/5,000 = $6.00

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