3. The following information is from 2013 statement of stockholders\' equity for

ID: 2654633 • Letter: 3

Question

3. The following information is from 2013 statement of stockholders' equity for Dynegy, Inc. 2013 Stockholders' eguity n millions, except shares 2012 Common stock, par value $0.01 (100,202,036 shares issued 2013, 99,999,196 shares issued 2012) 2,598 Additional paid-in capital 2,614 Accumulated other comprehensive income, net of tax 58 11 Accumulated deficit 463 107 2,503 Total Dynegy stockholders' equity 2,210 Noncontrolling interest Total Equity $2,503 $2,207 Dynegy has 420 million shares of common stock authorized. Assume the following transactions occurred during the 2014 Mar 10 Declare and pay a cash dividend of $1.75 per share May 6 Split stock 2-for-1 reducing the par value of the stock to $0.005 Aug 25 Issue a large stock dividend of 80% of the outstanding shares of common stock Required: a. Use the financial statement effects template below to record the three transactions. Balance Sheet Income Statement Contrib Cash Noncash Liab Earned Rev. Expen- Net Transaction Asset ities Capital Capita enues Income Assets Ses Mar 10 May 6 Aug 25

Explanation / Answer

Balance sheet

Income statement

Trans.

Cash +

Non cash =

Liab. +

Contrib +

Earned

Reve.

Exps.

Net income

Mar 10

350,352,156

-350,352,156

May 6

No effect

Aug 25

1,601,610

-1,601,610

Note: Total outstanding share = 100,202,036 + 99,999,196 = 200,201,232

Cash dividend = $1.75 × 200,201,232 = $350,352,156

Stock dividend = 200,201,232 × 80% × $0.01 = $1,601,610