STOCKHOLDER\'S EQUITY January 1, 2015 Preferred Common Stock (S5 par value, 300,
ID: 2591217 • Letter: S
Question
STOCKHOLDER'S EQUITY January 1, 2015 Preferred Common Stock (S5 par value, 300,000 shares authorized) Additional Paid in Capital Stock (6%, $100 par cumulative, 3,000 shares issued) 1,000,000 Preferred 15,000 Common 400,000 Retained Earnings. (January 1) Treasury Stock 5,000 shares 488,000 50,000 During 2015, the only transactions and events pertaining to stockholder's equity were April 17 Issued 1,000 shares of Preferred stock for $110 per share for cash July 22 sued 20,000 shares of common stock for a building On this date the stock was seling for $15 per share The building was appraised on this date for $290 000 Oet 14 Dec 31 Net income for the year was $215,000 Dividends of s 25 per share for common stockholders were declared by the board on Dec 29 There are no dividends in amears Sold 2,000 shares from treasury for $17 per share for cash What is the total dolla.amount.of the dividend declared (for both the Preferred& Common Stockholders O A $79,750 OB $103 250 O C $72 250 D $79.000 O E $78.250 Moving to another question will save responseExplanation / Answer
Calculate the total dividend declared:
Treasury stock should not be included in the calculation of common stock outstanding. Dividend is not required to pay for treasury stock.
Common stock shares as on January 1st, 2015 = Total amount for common stock/Par value
= $ 1,000,000/$5
= $ 200,00
Therefore, total dividend is $ 77,250. Above calculated figure is not found in given options.
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