Question 5 Not yet answered Marked out of 100 P Company has

Question 5 Not yet answered Marked out of 1.00 P Company has 59831 shares issued and outstanding On March 1, 2018 declared a 2 for 1 stock split when the market value was $19 per share On July 1, 2018 declared a cash dividend of of $1.05 per share Flag question The effect on retained earnings of this transaction is an increase/(decrease) of: Answer: 62822.55

Solution

Effect on retained earnings :

Share issued = 59831

Shares after stock split = 59831*2 = 119662 Shares

Cash dividend = 119662*1.05 = $125645.10

Decrease by = $125645.10