[The following in applies to the questions displayed below. The stockholders\' e

Question

[The following in applies to the questions displayed below. The stockholders' equity of TVX Company at the beginning of the day on February 5 follows: The stockholders' equity of TVX Company at the beginning of the day on february 5 follows Common stock-$15 par value, 150,000 shares authorized, 53,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings $ 795,000 525,000 675,000 Total stockholders' equity $1,995,000 On February 5, the directors declare a 16% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock's market value is $46 per share on February 5 before the stock dividend. The stock's market value is $40 per share on February 28.

Explanation / Answer

Answer:1

Feb 5:
Retained Earnings A/C Dr. $ 390080 (8480 shares x $46)
   To Common Stock Dividend Distributable A/C                            $127200 (8480 shares x $15 par value)
   To Paid-In Capital in Excess of Par - Common Stock A/C            $262880

Feb 28:
Common Stock Dividend Distributable A/C Dr.$ 127200
To Common Stock A/C                                               $127200

Answer:2 Book Value per Common Share = Stockholders' equity applicable to common shares /Number of common shares outstanding

=1,995,000/53,000 = 37.64 per share before

450 x 37.64 = 16938

1995000 / [53000 + 8480] =32.45 per share after

450x 32.45 = 14603

Answer:3 Market value = $46 before

Total market value = $46 x 450 = $20700

Market value = $40 after

Total market value = $40 x522 = $20880

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

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