he stockholders’ equity of TVX Company at the beginning of the day on February 5
ID: 2579377 • Letter: H
Question
he stockholders’ equity of TVX Company at the beginning of the day on February 5 follows:
On February 5, the directors declare a 18% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $47 per share on February 5 before the stock dividend. The stock’s market value is $40 per share on February 28.
Prepare entries to record both the dividend declaration and its distribution
One stockholder owned 950 shares on February 5 before the dividend. Compute the book value per share and total book value of this stockholder’s shares immediately before and after the stock dividend of February 5.
3. Compute the total market value of the investor’s shares in part 2 as of February 5 and February 28.
he stockholders’ equity of TVX Company at the beginning of the day on February 5 follows:
Explanation / Answer
1) Journal Entries :-
2) Book Value per Common share :-
= Stockholders' Equity / No. of common shares outstanding
= $1510000 / 62000
= $24.35 per Share before
Share Value = 950 * $24.35 = $23232,5
After ;-
= 1510000 / (62000+11160) = $20.64
= 1121 * $20.64
= 23137.44
3). Market Value Before :-
Market Value = $47
Total Market Value = 950 * $47 = $44650
Market Value after = 1121 * $40 = $44840
Particulars Debit ($) Credit ($) Retained Earnings a/c Dr. (62000*$47)*18% 524520 To Common Stock Diviend Distributable 111600 To Paid in Capital in excess of par value, common stock 412920 Common stock Dividend Distributable A/c Dr. 111600 To Common Stock 111600Related Questions
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