Question

The equity sections from Atticus Group’s 2015 and 2016 year-end balance sheets follow.    Stockholders’ Equity...


The equity sections from Atticus Group’s 2015 and 2016 year-end balance sheets follow.

  

Stockholders’ Equity (December 31, 2015)
Common stock—$6 par value, 50,000 shares
authorized, 30,000 shares issued and outstanding		 $ 180,000
Paid-in capital in excess of par value, common stock 140,000
Retained earnings 340,000
Total stockholders’ equity $ 660,000


Stockholders’ Equity (December 31, 2016)
Common stock—$6 par value, 50,000 shares
authorized, 35,000 shares issued, 5,000 shares in treasury		 $ 210,000
Paid-in capital in excess of par value, common stock 170,000
Retained earnings ($60,000 restricted by treasury stock) 420,000
800,000
Less cost of treasury stock (60,000 )
Total stockholders’ equity $ 740,000


The following transactions and events affected its equity during year 2016.
  

Jan. 5 Declared a $0.50 per share cash dividend, date of record January 10.
Mar. 20 Purchased treasury stock for cash.
Apr. 5 Declared a $0.50 per share cash dividend, date of record April 10.
July 5 Declared a $0.50 per share cash dividend, date of record July 10.
July 31 Declared a 20% stock dividend when the stock’s market value was $12 per share.
Aug. 14 Issued the stock dividend that was declared on July 31.
Oct. 5 Declared a $0.50 per share cash dividend, date of record October 10.

2.

value:
5.00 points

Required information

Required:

1. How many common shares are outstanding on each cash dividend date?

eBook & Resources

eBook: Explain the items reported in retained earnings.eBook: Record purchases and sales of treasury stock and the retirement of stock.eBook: Record transactions involving cash dividends, stock dividends, and stock splits.

Check my work

3.

value:
2.00 points

Required information

2. What is the total dollar amount for each of the four cash dividends?

eBook & Resources

eBook: Explain the items reported in retained earnings.eBook: Record purchases and sales of treasury stock and the retirement of stock.eBook: Record transactions involving cash dividends, stock dividends, and stock splits.

Check my work

4.

value:
5.00 points

Required information

3. What is the amount of the capitalization of retained earnings for the stock dividend?

eBook & Resources

eBook: Explain the items reported in retained earnings.eBook: Record purchases and sales of treasury stock and the retirement of stock.eBook: Record transactions involving cash dividends, stock dividends, and stock splits.

Check my work

5.

value:
2.00 points

Required information

4. What is the per share cost of the treasury stock purchased? (Round your answer to 2 decimal places.)

eBook & Resources

eBook: Explain the items reported in retained earnings.eBook: Record purchases and sales of treasury stock and the retirement of stock.eBook: Record transactions involving cash dividends, stock dividends, and stock splits.

Check my work

6.

value:
5.00 points

Required information

5. How much net income did the company earn during year 2016?

eBook & Resources

eBook: Explain the items reported in retained earnings.eBook: Record transactions involving cash dividends, stock dividends, and stock splits.eBook: ecord purchases and sales of treasury stock and the retirement of stock.

Business   Accounting   
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Homework Answers

Answer #1
Cash dividend date Shares outstanding Rate of cash dividend Amt of cash dividend
5-Jan 30000 $0.50 $15,000
5-Apr 25000 $0.50 $12,500
(30000-5000)
5-Jul 25000 $0.50 $12,500
5-Oct 30000 $0.50 $15,000
25000+(25000*20%)
Ans 1
Cash dividend date Shares outstanding
5-Jan 30000
5-Apr 25000
(30000-5000)
5-Jul 25000
5-Oct 30000
ans 2
Cash dividend date Amt of cash dividend
5-Jan 15000
5-Apr 12500
5-Jul 12500
5-Oct 15000
ans 3
Capitalization of retained earnings 60000
25000*20%*12
ans 4
Per share cost of treasury stock
60000/5000 12
ans 5 Net income
340000+NI-60000-15000-12500-12500-15000= 420000
340000-60000-15000-12500-12500-15000-420000= NI
Net income 195000
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