On November 1, 2017, Kalen Corporation’s stockholders’ equity section is as follows: Common stock, $10 par value $600,000 Paid-in capital in excess of par value—Common Stock 180,000 Retained earnings 200,000 Total stockholders’ equity $980,000 On November 1, Kalen declares and distributes a 15% stock dividend when the fair value of the stock is $16 per share.Indicate the balances in the stockholders' equity accounts after the stock dividend has be:a. Common Stock .b. Paid In Capital In Excess of Par Value .c. Retained Earnings .d. Total Stockholders' Equity .
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Ответ:
Common stock is $690,000
Paid-in capital in excess of par value is $234,000
Retained earnings is $56,000
Total stockholders's equity is $980,0000
Explanation:
Stock dividend in unlike cash dividend because in the former dividends are paid in form free issue of shares to shareholders and in the latter actual cash is paid as dividends.The former is opted for when the retained earnings from dividends is paid from is required for alternative uses other than payment of dividends such as investment in capital projects, as retained earnings is the cheapest form of finance at the business disposal.
The stock dividends to be issued =15%*$600,000/$10
=9000 more shares
The value of stock dividend using fair value of $16 per share,is broken down as follows:
Dr Retained earnings($16*9000) $144,000
Cr Common stock ($10*9000) $90,000
Cr Paid-in capital in excess of par($6*9000) $54000
Hence:
Common stock=($600,000+$90,000)=$690,000
Paid-in capital in excess of par value
($180,000+$54,000) =$234,000
Retained earnings
($200,000-$144,000) =$56,000
Total stockholders's equity $980,000
Ответ:
The Answer is given below
Explanation:
a. Common Stock $600,000
b. Paid in capital in excess of par value $180,000
c. Retained Earnings= ($200,000-($600,000*15%))=$110,000
d. Total Stockholders' Equity= $180,000+$600,000+$110,000=$890,000
Please note that dividend is paid on par value which is $10*15%=1.5 per share.
Total shares*dividend per share=total dividend paid
1.5*($600,000/10)=$90,000
or $600,000*15%=$90,000
Therefore dividend of $90,000 is deducted from retained earnings
Ответ:
Explanation:
Previously the government was earning 22000 in tax revenue but since it increased the tax rate to 25%, Song taxable income went down to $82500. Therefore now government tax revenue is
25% of 82500 = 20625
So government tax revenue decreased by 1375 ( 22000-20625)