Question

KIM Corporation owned 50,000 shares of SHIN Corporation. These shares were purchased in 2014 for $550,000....

KIM Corporation owned 50,000 shares of SHIN Corporation. These shares were purchased in 2014 for $550,000. On November 15, 2018, KIM declared a property dividend of one share of SHIN for every ten shares of KIM held by a stockholder. On that date, when the market price of SHIN was $25 per share, there were 240,000 shares of KIM outstanding. What gain and net reduction in retained earnings would result from this property dividend?

Homework Answers

Answer #1
Number of SHIN Shares to be distributed                    24,000 =240000/10
Market Value of SHIN share to be distributed $ 600,000 =24000*25
Cost of SHIN 24,000 shares to be distributed $ 264,000 =550000*24000/50000
Gain from this property dividend $ 336,000 =600000-264000
Net Reduction in Retained earnings $ 264,000 =600000-336000
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
KIM Corporation owned 50,000 shares of SHIN Corporation. These shares were purchased in 2014 for $550,000....
KIM Corporation owned 50,000 shares of SHIN Corporation. These shares were purchased in 2014 for $550,000. On November 15, 2018, KIM declared a property dividend of one share of SHIN for every ten shares of KIM held by a stockholder. On that date, when the market price of SHIN was $25 per share, there were 240,000 shares of KIM outstanding. What gain and net reduction in retained earnings would result from this property dividend? a. Gain                                     Net Reduction in Retained Earnings...
Redford Corp owned 100,000 shares of Newman Corp. These shares were purchased in early 2016 for...
Redford Corp owned 100,000 shares of Newman Corp. These shares were purchased in early 2016 for $400,000. On May 5, 2018, Redford declared a property dividend of one share of Newman for every five shares of Redford held by a stockholder. On that date, when the market price of Newman was $3 per share, there were 50,000 shares of Redford outstanding. What unrealized loss and net reduction in retained earnings would result from this property dividend of Newman Corp to...
Equity Method On January 1, 2014, The Miller Corporation purchased 300,000 shares of The Mayfair Corporation...
Equity Method On January 1, 2014, The Miller Corporation purchased 300,000 shares of The Mayfair Corporation for $5.7 million. The investment represented 25 percent of The Mayfair Corporation’s outstanding common shares. During 2014, Mayfair reported net earnings of $2.25 million and paid a cash dividend of $0.15 per share. During 2015, Mayfair reported a net loss of $180,000 and again paid a dividend of $0.15 per share. Calculate the book value of Miller’s investment in Mayfair as of December 31,...
On January 31, 2018, Village Bank had 480,000 shares of $2 par value common stock outstanding....
On January 31, 2018, Village Bank had 480,000 shares of $2 par value common stock outstanding. On that date, the company declared a 9% stock dividend when the market price of the stock was $42 per share. The immediate effect of this dividend upon Village Bank was: A reduction in cash of $1,814,400. A reduction in retained earnings of $1,814,400. A reduction in retained earnings of $86,400. A liability to the stockholders of $86,400.
K owned 80% of the common stock of S. S had 50,000 shares of $5 par...
K owned 80% of the common stock of S. S had 50,000 shares of $5 par value common stock and 2,000 shares of preferred stock outstanding. Each preferred share received an annual per share dividend of $10.00 and is convertible into four shares of common stock. K did not own any of S’s preferred stock. S also had 600 bonds outstanding, each of which is convertible into ten shares of common stock. S’s annual after-tax interest expense for the bonds...
Knight Co. owned 80% of the common stock of Stoop Co. Stoop had 50,000 shares of...
Knight Co. owned 80% of the common stock of Stoop Co. Stoop had 50,000 shares of $5 par value common stock and 2,000 shares of preferred stock outstanding. Each preferred share received an annual per share dividend of $2 and is convertible into four shares of common stock. Knight did not own any of Stoop's preferred stock. Stoop also had 600 bonds outstanding, each of which is convertible into ten shares of common stock. Stoop's annual after-tax interest expense for...
In January 2018, Gardner Corporation was authorized to issue 100,000 shares of $10 par value common...
In January 2018, Gardner Corporation was authorized to issue 100,000 shares of $10 par value common stock and $50,000 shares of $80 par, 4 percent, preferred the journal entries for the following transactions: a) March Issued 25,000 shares of common stock for $21 per share for cash. date Description Debitt Credit b) March 1 Issued 5,000 shares of preferred stock for $90 per share for cash. Date Description Debit Credit c) June 1 Purchased 400 shares of common stock as...
Kirchner Company has 50,000 shares of $10 par value, 6% preferred stock and 300,000 shares of...
Kirchner Company has 50,000 shares of $10 par value, 6% preferred stock and 300,000 shares of $1 par value common stock outstanding. As of December 31, 2018, it had $900,000 of Retained earnings. On December 31, 2019, the Board of Directors is considering the distribution of a cash dividend to the common and preferred stockholders. No dividends were declared in 2017 and 2018 and no dividends were in arrears prior to 2017. The company is considering the following options. Option...
Hart Corporation purchased 350,000 shares of the outstanding common voting stock of Gotti Corporation on January...
Hart Corporation purchased 350,000 shares of the outstanding common voting stock of Gotti Corporation on January 2, 2021, at a cash cost of $8.00 per share as a short-term investment. At the date of purchase Gotti Corporation had outstanding 1,000,000 shares of common stock (par $1). At year end, December 31, 2021, Gotti reported net income of $200,000 and declared and paid a $50,000 cash dividend. The December 31, 2021, the market value of Gotti's stock was $7.50. Give the...
Hart Corporation purchased 350,000 shares of the outstanding common voting stock of Gotti Corporation on January...
Hart Corporation purchased 350,000 shares of the outstanding common voting stock of Gotti Corporation on January 2, 2021, at a cash cost of $8.00 per share as a short-term investment. At the date of purchase Gotti Corporation had outstanding 1,000,000 shares of common stock (par $1). At year end, December 31, 2021, Gotti reported net income of $200,000 and declared and paid a $50,000 cash dividend. The December 31, 2021, the market value of Gotti's stock was $7.50. Give the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT