The equity sections from Atticus Group’s 2015 and 2016 year-end balance sheets f

Question

The equity sections from Atticus Group’s 2015 and 2016 year-end balance sheets follow. Stockholders’ Equity (December 31, 2015) Common stock—$6 par value, 50,000 shares authorized, 35,000 shares issued and outstanding $ 210,000 Paid-in capital in excess of par value, common stock 170,000 Retained earnings 340,000 Total stockholders’ equity $ 720,000 Stockholders’ Equity (December 31, 2016) Common stock—$6 par value, 50,000 shares authorized, 41,200 shares issued, 4,000 shares in treasury $ 247,200 Paid-in capital in excess of par value, common stock 207,200 Retained earnings ($40,000 restricted by treasury stock) 440,000 894,400 Less cost of treasury stock (40,000 ) Total stockholders’ equity $ 854,400 The following transactions and events affected its equity during year 2016. Jan. 5 Declared a $0.50 per share cash dividend, date of record January 10. Mar. 20 Purchased treasury stock for cash. Apr. 5 Declared a $0.50 per share cash dividend, date of record April 10. July 5 Declared a $0.50 per share cash dividend, date of record July 10. July 31 Declared a 20% stock dividend when the stock’s market value is $12 per share. Aug. 14 Issued the stock dividend that was declared on July 31. Oct. 5 Declared a $0.50 per share cash dividend, date of record October 10. 1.value: 10.00 pointsRequired information Required: 1. How many common shares are outstanding on each cash dividend date?

Explanation / Answer

Date set by a company on which the investor must own shares, to be eligible for dividend, share split, bonus, rights issue or other capital gains as declared / announced by the company. It is the date established by the company for determining the shareholders who are entitled to receive dividend, bonus or rights shares of the company.

Jan. 5 Declared a $0.50 per share cash dividend, date of record January 10

The record date is January 10, 2016. Therefore the common shares that would be considered as outstanding for the cash dividend decalred is equal to the common shares outstanding on January 10, 2016.

Number of common shares outstanding = 35000

Apr. 5 Declared a $0.50 per share cash dividend, date of record April 10.

The company purchased 4000 treasury stock on March 20.

The number of shares that is outstanding on April 10 = 35000 - 4000 = 31000 to be considered for cash dividend declared on Apr.5.

Oct. 5 Declared a $0.50 per share cash dividend, date of record October 10

On July 31, company declared 20% stock dividend and on Aug 14, issued the stocks declared as dividend.

Number of common shares issued as stock dividend = 20% of 31000 = 6200

The number of shares outstanding on record date of Oct, 10 = 31000 + 6200 = 37200 to be considered for cash dividend declared on Oct 5.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.