On January 1, 2010, Metco, Inc., had issued an outstanding 574,600 shares of $2

Question

On January 1, 2010, Metco, Inc., had issued an outstanding 574,600 shares of $2 par value common stock. On March 15, 2010, Metco, Inc., purchased for its treasury 4,400 shares of its common stock at a price of $75 per share. On August 10, 2010, 1,400 of these treasury shares were sold for $84 per share. Metco's directors declared cash dividends of $1.20 per share during the second quarter and again during the fourth quarter, payable on June 30, 2010, and December 31, 2010, respectively. A 2% stock dividend was issued at the end of the year. There were no other transactions affecting common stock during the year. Calculate the total amount of the cash dividends paid in the second quarter. Calculate the total amount of cash dividends paid in the fourth quarter.' Calculate the number of shares of stock issued in the stock dividend.

Explanation / Answer

January 1, 2010 issued and outstanding 264,000 shares of common stock March 15, 2010 purchased 2,300 treasury shares; so now there are 261,700 shares of common stock 2nd quarter declared cash dividends of $.60 per share during the second quarter Cash dividends = 261,700 shares x $.60 = $157,020 August 10, 2010 sold 830 treasury shares; there are now 262,530 shares of common stock fourth quarter declared cash dividends of $.60 per share during the fourth quarter Cash dividends = 262,530 shares x $.60 = $157,518 Total cash dividends = $157,020 + $157,518 = $314,538 Cash Dividends Q2-157518 Q4-157518 Subtotal -315036 Stock -15752 Total all dividends (330,788) shares value amount pic re-divs cash … 1/1/2010 os 264000 2 528000 3/15/2010 ts -2300 2 -4600 -75900 8/10/2010 os 830 2 1660 37350 2nd qtr cash div 262530 -0.6 -157518 3rd qtr cash div 262530 -0.6 -157518 12/31/2010 stock div 262530 3% 7875.9 2 15751.8 os shares 270,405.90 12811.8 -38550 -315036 -340774.2

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