Ask Me Help Desk

Ask Me Help Desk (https://www.askmehelpdesk.com/forum.php)
-   Accounting (https://www.askmehelpdesk.com/forumdisplay.php?f=19)
-   -   1% common stock dividend (https://www.askmehelpdesk.com/showthread.php?t=550360)

  • Feb 2, 2011, 01:19 AM
    MEGAA
    1% common stock dividend
    Declared semiannual dividends of $1.20 on the preferred stock and $0.15 on the common stock (before the stock dividend). In addition, a 1% common stock dividend was declared on the common stock outstanding , to be capitalized at the fair market value of the common stock, which is estimated at $30.

    Aug 29 Cash- 1,280,000 (Debit)
    Treasuary stock - 1,040,000 (credit)
    Paid-in Capital from Sale of Treasury Stock - $240,000 (credit)

    Sep 1 Cash Dividends - 165,750 (credit)
    Cash dividens payable - 165,750 (debit)
    Sep 1 Stock Dividends ?
    Stock dividends distributable?
    Paid-in Capital in Excess of Par Value - Common Stock?
  • Feb 14, 2011, 02:10 PM
    Debs_830
    Assuming this is a question from the following book:
    Financial and Managerial Accounting By Carl S. Warren, James M. Reeve, Jonathan Duchac
    The first part of the Sept 1 entry gives you the remaining amount of common stock. 165,750 - 80,000 shares of preferred at 1.2 per share = 69750 / 0.15 = 465,000. This is the amount of stock that is being declared. You'll have to multiply this amount by $30 and then by 1% that will give the amount of the stock dividends. Then to find the amount of distributable you will multiply 465,000 by the original dividend amount which is $25 par. The final entry is the difference between the 2 amounts.

  • All times are GMT -7. The time now is 08:56 PM.