Suleman purchased 100 shares of Green Corporation for $1,200. During the current year, Green declared a...

Suleman purchased 100 shares of Green Corporation for $1,200. During the current year, Green declared a nontaxable 5% stock dividend. What is the basis per share before and after the stock dividend is distributed (rounded)? (LABEL AND SHOW ALL WORK WITH CALCULATIONS)

A)

Before	After
$12	$11.43

B)

Before	After
$12	$12

C)

Before	After
$11	$12

D)

Before	After
$11.43	$12

Expert Solution

Solution:
		Clculation of Basis of Shares before the Stock Dividend

		Value of investment	$ 1,200
		Divide By	"/" By

		No. of shares Purchased	100

		Basis of Shares Befor Stock Dividend ($ 1200 / 100 Shares )	$ 12


		Clculation of Basis of Shares After the Stock Dividend
		Stock Dividend Declares	5%

		No. of shares received under stock Dividend = 100 Shares X 5% =	5 Shares


		Total Shares in hand after Stock Dividend = 100 Shares + 5 Shares =	105 Shares

		Basis of Shares After stock Dividend = Value of investment / No. of Shares in hand
		Basis of Shares After stock Dividend = $ 1,200 / 105 Shares
		Basis of Shares After stock Dividend = $ 11.43


	Answer = Option A = Before $ 12 ; After $ 11.43

ekkarill92 answered 1 year ago

Golden Corporation declared and paid $3,900 of cash dividends during the current year ended December 31....

Golden Corporation declared and paid $3,900 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data: Required: 1. Complete the horizontal analyses for each item in Golden Corporation’s comparative financial statements. TIP: Calculate the increase (decrease) by subtracting the previous year from the current year. Calculate the percentage by dividing the amount of increase (decrease) by the previous year balance. 2-a. Use the horizontal (trend) analyses to identify the accounts where...

Golden Corporation declared and paid $3,700 of cash dividends during the current year ended December 31....

Golden Corporation declared and paid $3,700 of cash dividends during the current year ended December 31. Its financial statements also reported the following summarized data: Current Previous Income Statement Sales revenue $ 215,000 $ 193,000 Cost of goods sold 124,000 114,000 Gross profit 91,000 79,000 Operating expenses 60,300 56,000 Interest expense 3,400 3,300 Income before income taxes 27,300 19,700 Income tax expense 8,190 3,700 Net income $ 19,110 $ 16,000 Balance Sheet Cash $ 5,410 $ 8,700 Accounts receivable (net)...

Over a 4 year period the Yellow corporation purchased 100% of the outstanding voting shares of...

Over a 4 year period the Yellow corporation purchased 100% of the outstanding voting shares of Green Co. The acquisition was made in a series of steps as follows... Date % Purchase Price January, Year 1 5% 5,000 January, Year 2 10% 12,000 January, Year 3 10% 15,000 January, Year 4 75% 200,000 Total 100% 232,000 Any excess of the purchase price over the net book value of the assets was attributed to goodwill. The acquisition in Year 3 allowed...

Senior Company owns 100 percent of the outstanding shares of Junior. During the current year, Senior...

Senior Company owns 100 percent of the outstanding shares of Junior. During the current year, Senior sold inventory costing $90,000 to Junior for $100,000. Junior has resold all of this merchandise to outside parties by the last day of the year. For the year, Senior reported cost of goods sold of $600,000 and Junior reported cost of goods sold of $500,000. What is the total amount reported on the consolidated income statement for cost of goods sold?

Ignatius Corporation had 14 million shares of common stock outstanding during the current calendar year. It...

Ignatius Corporation had 14 million shares of common stock outstanding during the current calendar year. It issued 23,000, $1,000, convertible bonds on January 1. Each bond is convertible into 50 shares of common stock. The bonds were issued at face amount and pay interest semiannually at an annual rate of 11%. On June 30, Ignatius issued 230,000 shares of $100 par 6% cumulative preferred stock. Dividends are declared and paid quarterly. Ignatius has an effective tax rate of 40%. Ignatius...

Maureen owns all of the stock in Green Corporation. Green owns 10,000 shares of Micro Corporation,...

Maureen owns all of the stock in Green Corporation. Green owns 10,000 shares of Micro Corporation, whose value has increased by 1000% since they were purchased eight years ago. Maureen would like to have the shares distributed to her, but she wants to avoid the tax bill that would result if they were distributed as a dividend from Green Corporation. Her son, who is taking classes for his MBA, has suggested that she create Brown Corporation with herself as the...

XYZ Corporation declared a $.10 cash dividend on the 10,000 shares outstanding.

ITS ALL SAME QUESTIONXYZ Corporation declared a $.10 cash dividend on the 10,000 shares outstanding.Prepare the necessary Journal EntriesDate of DeclarationDate of RecordDate of PaymentOn June 15, the company’s board of directors declared a 10% stock dividend to be distributed on July 30th to the stockholder’s on record for July 3. The company had 200,000 shares of $1 par value stock outstanding with a market value of $20. Prepare the required Journal Entries.ABC had a 2:1 stock split. Outstanding shares...

Bruce and Amanda are married during the tax year. Bruce is a botanist at Green Corporation....

Bruce and Amanda are married during the tax year. Bruce is a botanist at Green Corporation. Bruce earns a salary of $70,000 per year. Amanda owns an accounting practice as a sole proprietor (it qualifies as a full trade or business). Amanda generates $100,000 of revenues during the year. She has the following business payments associated with her firm: Utilities: $2,000 Office Rent: $15,000 Self-Employment Tax (hers): $10,000 Salary for her secretary: $25,000 Fines/Penalties: $2,500 State Income Tax (from business):...

At the beginning of the year, office supplies of $1,200 were on hand. During the year,...

At the beginning of the year, office supplies of $1,200 were on hand. During the year, Tempo Air Conditioning Service paid $2,000 for more office supplies. At the end of the year, Tempo has $1,000 of office supplies on hand.Read the requirements. Requirement 1. Record the adjusting entry assuming that Tempo records the purchase of office supplies by initially debiting an asset account. Post the adjusting entry to the Office Supplies and Supplies Expense T-accounts. Make sure to include the...

41) If you have 100 shares of Google Inc. The stock is traded at $1,200. We...

41) If you have 100 shares of Google Inc. The stock is traded at $1,200. We assume that the firm will announce 10:1 stock split. What’s the total number of shares you will have after the stock split? answer is 1,000 shares 42) Based on the information in Question 41, what will be the total value of your holdings of Google stock after the stock split? a) $120,000 b) $1,200,000 c) $12,000 d) $1,200 45) A company purchased $25,000 worth...

Question