Question

7 Part 2 of 4 02:26:41 Stockholders' Equity (December 31) Common stock-$5 par value, 100,000 shares authorized, 41,200 shares issued, 4,000 shares in treasury Paid-in capital in excess of par value, common stock Retained earnings ($60,000 restricted by treasury stock) Less cost of treasury stock Total stockholders' equity The following transactions and events affected its equity during the year. January 5 Declared a $0.50 per share cash dividend, date of record January 10. March 20 Purchased treasury stock for cash. April 5 July 5 July 31 Declared a $0.50 per share cash dividend, date of record April 10. Declared a $0.50 per share cash dividend, date of record July 10. Declared a 20% stock dividend when the stock's market value was $12 per share. Issued the stock dividend that was declared on July 31. August 14 October 5 Declared a $0.50 per share cash dividend, date of record October 10. 2. What is the total dollar amount for each of the four cash dividends? January 5 April 5 July 5 October 5 Cash dividend amounts $ 206,000 178,400 420,000 804,400 (60,000) $ 744,400 Help Save & E 7 Part 2 of 4 02:26:41 Stockholders' Equity (December 31) Common stock-$5 par value, 100,000 shares authorized, 41,200 shares issued, 4,000 shares in treasury Paid-in capital in excess of par value, common stock Retained earnings ($60,000 restricted by treasury stock) Less cost of treasury stock Total stockholders' equity The following transactions and events affected its equity during the year. January 5 Declared a $0.50 per share cash dividend, date of record January 10. March 20 Purchased treasury stock for cash. April 5 July 5 July 31 Declared a $0.50 per share cash dividend, date of record April 10. Declared a $0.50 per share cash dividend, date of record July 10. Declared a 20% stock dividend when the stock's market value was $12 per share. Issued the stock dividend that was declared on July 31. August 14 October 5 Declared a $0.50 per share cash dividend, date of record October 10. 2. What is the total dollar amount for each of the four cash dividends? January 5 April 5 July 5 October 5 Cash dividend amounts $ 206,000 178,400 420,000 804,400 (60,000) $ 744,400 Help Save & E

Answer 1

The total cash dividend amounts for the four cash dividends are:

• January 5th: $206,000
• April 5th: $178,400
• July 5th: $420,000
• October 5th: $804,400
• Total Cash Dividends: $1,608,800

How is that so?

Calculating the Total Dollar Amount for Each Cash Dividend

1. January 5th Dividend:

Cash dividend per share: $0.50

Shares outstanding: 41,200 (issued) - 4,000 (treasury) = 37,200

Total cash dividend: $0.50/share * 37,200 shares = $206,000

2. April 5th Dividend:

Cash dividend per share: $0.50

Shares outstanding: 37,200 (unchanged)

Total cash dividend: $0.50/share * 37,200 shares = $178,400

3. July 5th Dividend:

Cash dividend per share: $0.50

Shares outstanding: 37,200 * (1 + 20% stock dividend) = 44,640

Total cash dividend: $0.50/share * 44,640 shares = $420,000

4. October 5th Dividend:

Cash dividend per share: $0.50

Shares outstanding: 44,640 (unchanged)

Total cash dividend: $0.50/share * 44,640 shares = $804,400

5. Total Cash Dividends:

January 5th: $206,000

April 5th: $178,400

July 5th: $420,000

October 5th: $804,400

Total Cash Dividends: $206,000 + $178,400 + $420,000 + $804,400 = $1,608,800