Average Corporation has the following shares outstanding at the end of 2013:
Preferred shares, $ 3, no par value; 8,000 outstanding shares
Common shares, no par value; 30,000 outstanding shares
On October 1, 2014, the board of directors declared dividends as follows:
Preferred shares: Full dividend amount, payable December 20, 2014
Common shares: 10 percent common stock dividend (i. e., one additional share for each 10 held), issuable December 20, 2014 On December 20, 2014, the market prices were $ 50 per preferred share and $ 32 per common share.
Explain the effect of each of the dividends on the assets, liabilities, and shareholders’ equity of the company at each of the specified dates.

  • CreatedAugust 04, 2015
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