Jenny OTB Corporation reports the following shareholders' equity as of December 31, 2021: Instructions
a) Assume the board of directors declares dividends totaling $ 1,500,000 to the shareholders. The preferred shares are cumulative, and no dividends were declared last year. Calculate the amount per share each class of shares will receive.
b) Assume the board of directors authorizes a 2-for-1 split on the common shares. Calculate the number of shares outstanding after the split and the average per share amount for both classes of shares.
c) Assume the board of directors authorizes a 10% stock dividend on the common shares after the stock split. The current selling price of the common shares is $ 11. Prepare the journal entry to record the declaration and distribution of the stock dividend.

Question

Jenny OTB Corporation reports the following shareholders' equity as of December 31, 2021:  Instructions 
a) Assume the board of directors declares dividends totaling $ 1,500,000 to the shareholders. The preferred shares are cumulative, and no dividends were declared last year. Calculate the amount per share each class of shares will receive.
b) Assume the board of directors authorizes a 2-for-1 split on the common shares. Calculate the number of shares outstanding after the split and the average per share amount for both classes of shares.
c) Assume the board of directors authorizes a 10% stock dividend on the common shares after the stock split. The current selling price of the common shares is $ 11. Prepare the journal entry to record the declaration and distribution of the stock dividend.

Quizplus · Accepted Answer

The Answer of Jenny OTB Corporation reports the following shareholders' equity as of December 31, 2021:  Instructions 
a) Assume the board of directors declares dividends totaling $ 1,500,000 to the shareholders. The preferred shares are cumulative, and no dividends were declared last year. Calculate the amount per share each class of shares will receive.
b) Assume the board of directors authorizes a 2-for-1 split on the common shares. Calculate the number of shares outstanding after the split and the average per share amount for both classes of shares.
c) Assume the board of directors authorizes a 10% stock dividend on the common shares after the stock split. The current selling price of the common shares is $ 11. Prepare the journal entry to record the declaration and distribution of the stock dividend.

Jenny OTB Corporation Reports the Following Shareholders' Equity as of December