Question

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—$25 par value, 150,000 shares
authorized, 72,000 shares issued and outstanding		 $ 1,800,000
Paid-in capital in excess of par value, common stock 525,000
Retained earnings 675,000
Total stockholders’ equity $ 3,000,000


On February 5, the directors declare a 12% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $39 per share on February 5 before the stock dividend. The stock’s market value is $35 per share on February 28.

1. One stockholder owned 800 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. (Round your "Book value per share" answers to 3 decimal places.)
2. Compute the total market value of the investor’s shares in part 2 as of February 5 and February 28.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1.

Particulars $ Per Share Value Remark
Par Value of One Share 25
Share Premium Per Share 7.29
(525000/72000)
Total Paid in Value of one share 32.290
No. of Shares hold by Shareholder 800
Book Value of Share to him before dividend (This will be the Value paid by him for acquiring the shares i.e. @ 32.29 for 800 shares) 25832.000 32.290 Book Value for shareholder before dividend
Book Value of Shares after Dividend is declared on Feb 5 25832.000 32.290 As Dividend is to be given for Shares hold at 15th Feb hense right to receive dividend will be established on 15th Feb only. Hence the dividend will be recorded on that day. Further one more view is there, Dividend will be taken as the income hence it will not impact the Book Value of share.

2.

Particulars Per Share Value No. of Sahres hold Total Value Remark
Market Value of Share on Feb 5 (Before Dividend) 39 800                  31,200.00 Per Share Value Given in Ques
Market Value of Share on Feb 5 (After Dividend) 36 800                  28,800.00 Refer Working below
Market Value of Share on Feb 28 35 800                  28,000.00 Per Share Value Given in Ques
Working
Market Value of Share on Feb 5 (Before Dividend) 39
Dividend per share (12% of $ 25) 3 After Dividend declaration market value will fall by Dividend amount
Market Value of Share on Feb 5 (After Dividend) 36
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
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—$25 par value, 150,000 shares authorized, 56,000 shares issued and outstanding $ 1,400,000 Paid-in capital in excess of par value, common stock 425,000 Retained earnings 546,000 Total stockholders’ equity $ 2,371,000 On February 5, the directors declare a 2% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $36 per share on February 5...
[The following information applies to the questions displayed below.] The stockholders’ equity of TVX Company at...
[The following information applies to the questions displayed below.] 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, 65,000 shares issued and outstanding $ 975,000 Paid-in capital in excess of par value, common stock 525,000 Retained earnings 675,000 Total stockholders’ equity $ 2,175,000 On February 5, the directors declare a 12% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s...
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—$25 par value, 150,000 shares authorized, 59,000 shares issued and outstanding $ 1,475,000 Paid-in capital in excess of par value, common stock 426,000 Retained earnings 553,000 Total stockholders’ equity $ 2,454,000 On February 5, the directors declare a 2% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $36 per share on February 5...
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—$10 par value, 150,000 shares authorized, 60,000 shares issued and outstanding $ 600,000 Paid-in capital in excess of par value, common stock 425,000 Retained earnings 550,000 Total stockholders’ equity $ 1,575,000 On February 5, the directors declare a 20% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $40 per share on February 5...
2. One stockholder owned 450 shares on February 5 before the dividend. Compute the book value...
2. One stockholder owned 450 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. (Round your "Book value per share" answers to 3 decimal places.) 3. Compute the total market value of the investor’s shares in part 2 as of February 5 and February 28. Required information [The following information applies to the questions displayed below.] The stockholders’...
Exercise 11-6 Stock dividends and per share book values LO P2 [The following information applies to...
Exercise 11-6 Stock dividends and per share book values LO P2 [The following information applies to the questions displayed below.] The stockholders’ equity of TVX Company at the beginning of the day on February 5 follows: Common stock—$5 par value, 150,000 shares authorized, 51,000 shares issued and outstanding $ 255,000 Paid-in capital in excess of par value, common stock 525,000 Retained earnings 675,000 Total stockholders’ equity $ 1,455,000 On February 5, the directors declare a 16% stock dividend distributable on...
Exercise 11-6 Stock dividends and per share book values LO P2 [The following information applies to...
Exercise 11-6 Stock dividends and per share book values LO P2 [The following information applies to the questions displayed below.] The stockholders’ equity of TVX Company at the beginning of the day on February 5 follows: Common stock—$5 par value, 150,000 shares authorized, 54,000 shares issued and outstanding $ 270,000 Paid-in capital in excess of par value, common stock 525,000 Retained earnings 675,000 Total stockholders’ equity $ 1,470,000 On February 5, the directors declare a 16% stock dividend distributable on...
1. Prepare entries to record both the dividend declaration and its distribution. Required information [The following...
1. Prepare entries to record both the dividend declaration and its distribution. Required information [The following information applies to the questions displayed below.] The stockholders’ equity of TVX Company at the beginning of the day on February 5 follows: Common stock—$10 par value, 150,000 shares authorized, 71,000 shares issued and outstanding $ 710,000 Paid-in capital in excess of par value, common stock 525,000 Retained earnings 675,000 Total stockholders’ equity $ 1,910,000 On February 5, the directors declare a 16% stock...
The stockholders’ equity section of Jun Company’s balance sheet as of April 1 follows. On April...
The stockholders’ equity section of Jun Company’s balance sheet as of April 1 follows. On April 2, Jun declares and distributes a 10% stock dividend. The stock’s per share market value on April 2 is $20 (prior to the dividend). Common stock $5 par value, 375000 shares authorized, 200000 shares issued and outstandings. $1000000 Paid in capital in excess of par value, common stock. 600000 Retained earnings. 833000 Total stockholders equity. $2433000 1) Journalize the declaration and distribution of the...
The stockholders’ equity section of the balance sheet for the Ace Company appeared as follows before...
The stockholders’ equity section of the balance sheet for the Ace Company appeared as follows before their recent stock dividend: Common Stock, $5 par, 100,000 shares issued and outstanding $ 500,000 Paid in Capital in Excess of Par $ 750,000 Retained Earnings $ 800,000 Total Stockholders’ Equity $ 2,050,000 The company declared a 10% stock dividend when the market price per share was $12. In the space provided, write in the amounts of each of the components of the stockholders’...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT