The equity sections from Atticus Group\'s 2015 and 2016 year-end balance sheets

Question

The equity sections from Atticus Group's 2015 and 2016 year-end balance sheets follow Stockholders' Equity (December 31, 2015) Common stock-$4 par value, 50,000 shares authorized, 30,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings $ 120,000 80,000 360,000 Total stockholders' equity $560,000 Stockholders' Equity (December 31, 2016) Common stock-$4 par value, 50,000 shares authorized, 35,200 shares issued, 4,000 shares in treasury Paid-in copital in excess of par value, common stock Retained earnings ($60,000 restricted by treasury stock) $ 140,800 132,000 420,000 692,800 60,000) Less cost of treasury stock Total stockholders' equity $632,800 The following transactions and events affected its equity during year 2016 Jan. 5 Declared a $0.40 per share cash dividend, date of record January 10 Mar. 20 Purchased treasury stock for cash. Apr. 5 Declared a $0.40 per share cash dividend, date of record April 10 July 5 Declared a $0.40 per share cash dividend, date of record July 10 July 31 Declared a 20% stock dividend when the stock's market value is $14 per share Aug. 14 Issued the stock dividend that was declared on July 31. Oct. 5 Declared a $0.40 per share cash dividend, date of record October 10

Explanation / Answer

1- How many common share are outstanding on each cash dividend date.

42240

2- what is the dollar amount for each of the four cash dividend

(42240*.40)

16896

3-What is the amount of capitalization of retained earnings for the stock dividend

total no of common stock outstanding = 35200

Market value = 14

Stock dividend rate = 20%

amount for capitalization of retained earnings = 35200*14= 140800*20% = 28160

4-What is the per share cost of the treasury stock purchased

cost of treasury stock = 60000

no of treasury stock = 4000

cost of treasury stock = 60000/4000 = 15 per stock

5- How much net income did the company earn during the year 2016

Net Income during the year 2016 =

Retained earning at the end of the year - retained earning at the start of the year

420000- 360000= 60000

Dividend declared during the year = 12000+14080+14080+16896 =57056

Net income = 60000+57056 =117056

Cash dividend date Jan 5 Apl 5 July 5 oct 5 Common shares outstanding 30000 35200 35200

42240

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