Kouk Corp. has the following capital structure at the end of 20X7: 100,000 Class A shares

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Kouk Corp. has the following capital structure at the end of 20X7:
• 100,000 Class A shares carrying five votes per share.
• 100,000 Class B shares, carrying one vote per share.
• Dividends are shared on a 5:1 ratio—$5 to Class A for every dollar paid to Class B.
Additional information:
• Kouk Corp.’s tax rate is 20%.
• Net earnings amounted to $2,100,000 for 20X7; there were no discontinued operations.
• Kouk paid $1,200,000 in dividends at the end of 20X7.


Required:
1. Determine the amount of dividends that were paid to Class A and Class B shares, both in total and per share for each class.
2. Calculate basic EPS.

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Related Book For  book-img-for-question

Intermediate Accounting Volume 2

ISBN: 9781260881240

8th Edition

Authors: Thomas H. Beechy, Joan E. Conrod, Elizabeth Farrell, Ingrid McLeod-Dick, Kayla Tomulka, Romi-Lee Sevel

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