Question

The Western Pipe Company has the following capital section in its balance sheet. Its stock is currently selling for $6 per share.
Common stock (50,000 shares at $2 par) ....... $ 100,000
Capital in excess of par ............. 100,000
Retained earnings ............... 250,000
$450,000
The firm intends to first declare a 15 percent stock dividend and then pay a 25-cent cash dividend (which also causes a reduction of retained earnings). Show the capital section of the balance sheet after the first transaction and then after the second transaction.



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  • CreatedOctober 14, 2014
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