Homework SourseIssued a 5 percent stock dividend on the common stock The ma
Issued a 5 percent stock dividend on the common stock. The market value at the dividend declaration date was $37 per share.
Record each of these events in a horizontal statements model like the following one. In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA) and net change in cash (NC). Use NA to indicate that an element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign.)
| Concord Corp. completed the following transactions in 2014, the first year of operation: |
Solution
Note:- 2:1 splitting up shares = 24150 shares * 2/1
= 48300
annual cash dividend to preferred shareholders =4800 * $47 * 5%
=11280
| Assets | = | Equity | Revenue | - | expense | = | Net income | Cash flow | |||
| Preferred | Common | Retained | |||||||||
| 1 | 759000 | = | 0 | 506000 | 253000 | FA | |||||
| 2 | 235200 | = | 225600 | 9600 | FA | ||||||
| 3 | (11280) | = | 0 | 0 | (11280) | FA | |||||
| 4 | 0 | = | 0 | 42550 | (42550) | NA | |||||
| 5 | 0 | = | 0 | 796950 | (796950) | NA | |||||
| 6 | 132100 | = | 0 | 0 | 0 | 271500 | - | 139400 | = | 132100 | OA |
| 1115020 | NC |
