Question

The balance sheet of Cohen Enterprises includes the following stockholders’ equity section:
Common stock, $1 par, 330,000 shares authorized,
150,000 shares issued and outstanding ............ $150,000
Additional paid-in capital —common stock .......... 341,800
Total capital stock .................... $491,800
Retained earnings .................... 173,000
Total equity ........................ $664,800

Required:
1. On April 15, 2011, when its stock was selling for $18 per share, Cohen Enterprises issued a small stock dividend. After making the journal entry to recognize the stock dividend, Cohen’s total capital stock increased by $270,000. In percentage terms, what was the size of the stock dividend?
2. Ignoring the small stock dividend discussed in (1), assume that on June 1, 2011, when its stock was selling for $22 per share, Cohen Enterprises issued a large stock dividend. After making the journal entry to recognize the stock dividend, Cohen’s retained earnings decreased by $75,000. In percentage terms, what was the size of the stock dividend?


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  • CreatedSeptember 22, 2015
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