Please answer 4 & 5 Required information The following information applies to th

Question

Please answer 4 & 5

Required information The following information applies to the questions displayed below.] The equity sections from Atticus Group's 2016 and 2017 year-end balance sheets follow Stockholders' Equity (December 31, 2016) Common stock-$5 par value, 100,000 shares authorized, 35,000 shares issued and $175,000 outstanding Paid-in capital in excess of par value, common stock Retained earnings 360,000 $670,000 Total stockholders' equity Stockholders' Equity (December 31, 2017) Common stock-$5 par value, 100,000 shares authorized, 41,000 shares issued, 5,000 $205,000 177,000 shares in treasury Paid-in capital in excess of par value, common stock Retained earnings ($30,000 restricted by treasury stock) 420,000 802,000 (30,000 $772,000 Less cost of treasury stock Total stockholders' equity The following transactions and events affected its equity during year 2017 Jan. 5 Declared a $0.60 per share cash dividend, date of record January 10. Mar. 20 Purchased treasury stock for cash. Apr. 5 Declared a $0.60 per share cash dividend, date of record April 10. July 5 Declared a $0.60 per share cash dividend, date of record July 10 July 31 Declared a 20% stock dividend when the stock's market value was $12 per share. Aug. 14 Issued the stock dividend that was declared on July 31 Oct. 5 Declared a $0.60 per share cash dividend, date of record October 10.

Explanation / Answer

Solution 4:

Per share cost of treasury stock = Cost of treasury stock / Nos of shares in treasury stock = $30,000 / 5000 = $6 per unit.

Solution 5:

Dividend paid in 2017 (Cash and stock) = (35000 * $0.6) + (30000 * $0.60) + (30000*$0.60) + (6000*$12) + (36000*$0.60) = $150,600

Net Income for 2017 = Ending retained earnings - Beginning retained earnings + Dividend paid

= $420,000 - $360,000 + $150,600 = $210,600

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