A Company Declared A 0.25 Per Share Cash Dividend 284757

A Company Declared A 025 Per Share Cash Dividend The Company Has 16

A company declared a $0.25 per share cash dividend. The company has 160,000 shares authorized, 152,000 shares issued, and 6,400 shares in treasury stock. The journal entry to record the dividend declaration is: Debit Retained Earnings $38,000; credit Common Dividends Payable $38,000. Alternatively, other options provide different amounts for retained earnings and dividends payable, but the correct journal entry based on the share data is Debit Retained Earnings $38,000; credit Common Dividends Payable $38,000.

In a separate scenario, a company declared a $0.50 per share cash dividend. It has 460,000 authorized shares, 437,000 issued shares, and 18,400 treasury shares. The dividend payable is calculated based on outstanding shares as (Issued shares - Treasury shares) x Dividend per share = (437,000 - 18,400) × $0.50 = 418,600 × $0.50 = $209,300. The correct journal entry to record the payment is Debit Common Dividends Payable $209,300; credit Cash $209,300.

Regarding financial ratios, a company with earnings per share of $8.70, dividend per share of $1.50, and market price per share of $100.92 has a price-earnings ratio calculated as Market Price per Share / Earnings per Share = $100.92 / $8.70 ≈ 11.60. The ratio indicates how many times earnings investors are willing to pay for the stock, an important metric for assessing valuation.

Xtreme Sports, with $300,000 of 8% noncumulative, nonparticipating preferred stock and $700,000 of common stock, faced no dividends in its first year but paid $50,000 during the second year. Since preferred stock is noncumulative and nonparticipating, preferred shareholders must be paid their entire dividend before any dividend to common shareholders. The preferred stock dividend for the year is $300,000 × 8% = $24,000. The remaining dividend of $50,000 - $24,000 = $26,000 is allocated to common stockholders. However, as the preferred is nonparticipating, they receive only their fixed dividend, and the excess above preferred dividends goes to common shareholders, assuming participation is non applicable here. Typically, in nonparticipating preferred, preferred gets $24,000, and the remaining $26,000 is for common stockholders.

A company with net income of $935,000 and 187,000 weighted-average shares outstanding has a dividend per share of $0.80. The price-earnings ratio is calculated as Market Price per Share / Earnings per Share. Earnings per Share is Net Income / Shares Outstanding = $935,000 / 187,000 ≈ $5.00. Thus, P/E ratio is $95 / $5.00 ≈ 19.00.

When a company issues 260 shares of $100 par stock for $31,000, the total paid-in capital in excess of par is computed as Total Cash Received - Par Value of Shares = $31,000 - (260 × $100) = $31,000 - $26,000 = $5,000. This amount is recorded as Paid-in Capital in Excess of Par.

Similarly, issuing 85 shares of $100 par stock for $9,500 yields a paid-in capital in excess of par of $9,500 - (85 × $100) = $9,500 - $8,500 = $1,000.

From reported data with 33,000 authorized shares, 28,000 issued, and 10,000 treasury shares, the outstanding shares are issued shares minus treasury shares: 28,000 - 10,000 = 18,000. There is a discrepancy with "outstanding shares" listed as 43,000, which appears inconsistent; typically, outstanding shares = issued shares - treasury shares = 18,000.

Declaring a $1.10 cash dividend per share for a company with 16,500 shares outstanding and 17,000 issued shares, with 22,000 authorized shares, results in a total dividend of $1.10 x 16,500 = $18,150.

In case of a 10% stock dividend declared and issued when the retained earnings are $780,000, shares outstanding are 63,000, and market value per share is $18, with a par value of $5, the total stock dividend value is 10% of 63,000 = 6,300 shares. The total value is 6,300 × $18 = $113,400. The transfer from retained earnings reduces retained earnings by that amount, and common stock increases by 6,300 × $5 = $31,500. The difference ($113,400 - $31,500 = $81,900) increases Paid-in Capital in Excess of Par.

For a 49,000-share stock of $20 par value, a 5% stock dividend when the market value is $26 per share results in a dividend distribution of 49,000 × 5% = 2,450 shares. The total value at market is 2,450 × $26 = $63,700. The journal entry records a debit to Retained Earnings for $63,700 and a credit to Common Stock Dividend Distributable for $2,450 × $20 = $49,000, and the excess of $14,700 goes to Paid-in Capital in Excess of Par.

Regarding stockholder equities, with 13,500 issued shares at $10 par, and 1,700 treasury shares, the total common stock is 13,500 × $10 = $135,000. The cost per treasury share is total treasury stock cost divided by number of shares: $20,740 / 1,700 ≈ $12.20 per share.

Preferred stock of 1,500 shares at 7% cumulative, and total dividends of $500 in the first year, the preferred dividend owed in the second year must be paid before any to common. For preferred stock, the annual dividend is 1,500 × $10 × 7% = $1,050 per year. In the second year, the preferred stockholders are owed $1,050. Since no dividends were paid the first year, they are entitled to dividends for both years in the second year (assuming cumulative preferred), totaling $2,100.

In the initial transaction of forming a corporation, issuing 240 shares of $10 par stock for $4,400, the appropriate journal entry recognizes the stock issued and the excess paid over par. The entry is a debit to Cash for $4,400; a credit to Common Stock for 240 × $10 = $2,400; and a credit to Paid-in Capital in Excess of Par for $4,400 - $2,400 = $2,000.

To calculate the present value of a loan of $14,000 at 9% interest compounded annually over 3 years, using the present value factor of 0.7722, multiply the amount by the factor: $14,000 × 0.7722 = $10,811. This reflects the current worth of the future payment, essential for accurate accounting of liabilities.

Paper For Above instruction

Dividends and Stock Transactions: Financial Accounting and Measurement

The declaration and payment of dividends are fundamental transactions that impact a company's financial statements and provide insights into its financial health and management policies. When a company declares a cash dividend, it commits to distributing a specified amount per share, which affects its retained earnings and liabilities. The journal entries for these transactions reflect the reduction in retained earnings and the recognition of a dividend payable, which upon payment, reduces cash and the liability accordingly. For example, with 152,000 shares issued and 6,400 treasury shares, declaring a $0.25 dividend per share results in a total dividend payable calculated at 145,600 shares (issued minus treasury), leading to a journal entry debiting retained earnings by $36,400 and crediting dividends payable by the same amount.

Similarly, the payment of the dividend involves debiting the dividends payable account and crediting cash. This process ensures accurate, transparent accounting records that comply with Generally Accepted Accounting Principles (GAAP). Accurate recording of dividends ensures stakeholders can assess the company's dividend payout policies and its capacity to generate cash flows.

Stock dividends are also a common way companies distribute earnings, especially when retaining cash is a priority. A stock dividend involves issuing additional shares to existing shareholders, which increases the total shares outstanding and reallocates retained earnings to paid-in capital accounts. For example, a 10% stock dividend when retained earnings are $780,000 and 63,000 shares are outstanding at a market value of $18 per share, results in issuing 6,300 shares. The journal entry involves debiting retained earnings by the total market value of these shares, which equals $113,400, and crediting common stock at par value, increasing common stock and paid-in capital accordingly. This transaction does not affect total assets but changes the composition of equity accounts, reflecting reinvested earnings into increased share capital.

Stock splits and stock dividends have significant implications for shareholders and management. A stock split, such as a 5% stock dividend, increases the number of shares outstanding, diluting the par value per share but not affecting total shareholders' equity. The accounting treatment involves proportionally increasing the number of shares issued and outstanding while decreasing the par value per share, with no impact on total equity. This process makes shares more affordable and liquid but does not change the company's overall market capitalization or value.

Another critical consideration in stockholder equity is treasury stock, which represents company shares repurchased from shareholders. Calculating the cost per share of treasury stock involves dividing total treasury stock by the number of shares repurchased. For dated data with a total treasury stock value of $20,740 and 1,700 shares, the cost per share is approximately $12.20. Treasury stock reduces total equity, and its accounting treatment involves debiting treasury stock and reducing total stockholders' equity. This repurchase impacts liquidity and earnings per share, often used in stock buybacks to increase share value.

Preferred stock's dividend preference and its cumulative or noncumulative nature influence dividend distributions. For cumulative preferred stock, unpaid dividends accumulate and must be paid before common shareholders receive dividends in future periods. For example, with a 7% cumulative preferred stock of 1,500 shares at $10 par, unpaid dividends from the first year accrue and are paid in subsequent years, typically totaling $1,050 annually. In the second year, preferred shareholders are owed the accumulated dividends, ensuring their priority claim on company earnings.

The issuance of stock at a premium or discount impacts the composition of equities. When stock is issued above par value, the excess is recorded as paid-in capital in excess of par, reflecting additional contributions from shareholders. Accurate recording involves distinguishing the amount allocated to common stock and the additional paid-in capital, essential for transparent financial reporting.

Finally, valuing long-term liabilities such as loans involves discounting future payments to present value using appropriate interest rates and factors. For example, a $14,000 loan payable in three years at 9% compounded annually has a present value calculated by multiplying the amount by the present value factor (0.7722), resulting in a current liability of approximately $10,811. This valuation ensures precise financial reporting and effective management of liabilities and cash flows.

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