CBA Inc has 280,000 shares outstanding with a $5.5 par value. The shares were is
ID: 2636085 • Letter: C
Question
CBA Inc has 280,000 shares outstanding with a $5.5 par value. The shares were issued for $15.5. The stock is currently selling for $27.5. CBA has $6,000,000 in retained earnings and has declared a stock dividend that will increase the number of outstanding shares by 6.50%. What will be the capital in excess of par account after the stock dividend?
CBA Inc has 280,000 shares outstanding with a $5.5 par value. The shares were issued for $15.5. The stock is currently selling for $27.5. CBA has $6,000,000 in retained earnings and has declared a stock dividend that will increase the number of outstanding shares by 6.50%. What will be the capital in excess of par account after the stock dividend?
$2,800,000 $3,200,400 $4,359,900 $9,200,400Explanation / Answer
Date of Declaration: Retained Earning (shares x market price) =(18200*27.5) 500500 Stock Dividends Distributable( shares xpar) =(18200*5.5) 100100 Paid-in capital in excess of par-common difference =(18200*22) 400400 Day of Payment Stock Dividends Distributable 100100 common stock 100100
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