Coronado Inc. has retained earnings of $780000 and total stockholders’ equity of $2100000. It has 302000...

Coronado Inc. has retained earnings of $780000 and total stockholders’ equity of $2100000. It has 302000 shares of $5 par value common stock outstanding, which is currently selling for $30 per share. If Coronado declares a 10% stock dividend on its common stock:

net income will decrease by $151000.

retained earnings will decrease by $151000 and total stockholders’ equity will increase by $151000.

retained earnings will decrease by $906000 and total paid-in capital will increase by $906000.

retained earnings will decrease by $906000 and total stockholders’ equity will increase by $906000.

Expert Solution

SOLUTION :
		CALCULATION OF TOTAL VALUE OF STOCK DIVIDEND
		Numer of Common Shares Issued and outstanding = (A)	302,000	Shares
		Stock Dividend Declared % of total shares issued and outstanding (B)	10%
		Stock Dividend Declared Shares to be issued (C = AXB)	30,200	Shares
		Market Value of 1 Shares on date of declaration (D)	$ 30.00	Per Shares
		Par Value of the one shares	$ 5.00	Per Shares
		Addittional Paid in Captial (Market Value - Par Value) (F)	$ 25.00	Per Shares

		Total value of dividend = (CXD)	$ 906,000
		Par value of the Common Stock Dividend (CXE)	$ 151,000
		Value of Addittional paid in Capital (CXF)	$ 755,000





Journal Entries
Sr. No.	Date	Account Title and explanation	Debit	Credit

1	----------	Retained Earnings	$ 906,000
		Stock Dividend Distributable		$ 151,000
		Paid in Capital in Excess of Par - Common Stock		$ 755,000
		(To record the stock dividend declaration)


	IT means retained earnings will decrease by this transaction by $ 906,000 and total shareholders' will increase by $ 906,000


	Answer = Option 3 = retained earnings will decrease by $906000 and total stockholders’ equity will increase by $906000.

ekkarill92 answered 1 year ago

16. When there are significant changes in stockholders equity, generally, a retained earnings statement is not...

16. When there are significant changes in stockholders equity, generally, a retained earnings statement is not sufficient, requiring a statement of stockholders’ equity to be prepared. a. True b. False 17. The equity reporting for a Limited Liability Corporation is similar to that of a partnership but the changes in capital ate shown on a statement of members’ equity. a. True b. False 18. When a partner invests noncash assets in a partnership, the assets are recorded at the partner’s...

1. The accounting equation is defined as: a. Common Stock + Retained Earnings = Stockholders’ Equity....

1. The accounting equation is defined as: a. Common Stock + Retained Earnings = Stockholders’ Equity. b. Revenues - Expenses = Net Income. c. Revenues - Expenses - Dividends = Retained Earnings. d. Assets = Liabilities + Stockholders’ Equity. 2. On January 1, Art Inc. started the year with a $492,000 balance in Retained Earnings and a $605,000 balance in Common Stock. During the year, the company earned net income of $92,000, paid a dividend of $15,200, and issued more...

In the Stockholders' Equity section of a Balance Sheet: A. Retained Earnings goes first. B. common...

In the Stockholders' Equity section of a Balance Sheet: A. Retained Earnings goes first. B. common stock goes first. C. preferred stock goes first. D. assets are listed first.

The stockholders' equity section of the balance sheet typically includes the line items of retained earnings,...

The stockholders' equity section of the balance sheet typically includes the line items of retained earnings, common stock, treasury stock, and other comprehensive income. Select two of these line items (common stock and Treasury stock) and explain what their balances might indicate about how Ford Motor Company is utilizing the investment by its stockholders. In your response, address whether you would want to purchase stock in the company based on your analysis. Please use a scholarly article for reference.

Retained Earnings: Transactions and Statement The stockholders’ equity of Elson Corporation at January 1 is shown...

Retained Earnings: Transactions and Statement The stockholders’ equity of Elson Corporation at January 1 is shown below: 5 Percent preferred stock, $100 par value, 10,000 shares authorized; 6,000 shares issued and outstanding $600,000 Common stock, $5 par value, 200,000 shares authorized; 70,000 shares issued and outstanding $350,000 Paid-in capital in excess of par value-Preferred stock 40,000 Paid-in capital in excess of par value-Common stock 300,000 Retained earnings 656,000 Total Stockholders' Equity $1,946,000 The following transactions, among others, occurred during the...

Retained Earnings: Transactions and Statement The stockholders’ equity of Ranger Corporation at January 1 appears below:...

Retained Earnings: Transactions and Statement The stockholders’ equity of Ranger Corporation at January 1 appears below: Common stock, $10 par value, 200,000 shares authorized; 80,000 shares issued and outstanding $800,000 Paid-in capital in excess of par value 480,000 Retained earnings 305,000 During the year, the following transactions occurred: May 12 Declared a 15 percent stock dividend; market value of the common stock was $22 per share. June 6 Issued the stock dividend declared on May 12. Dec. 5 Declared a...

Retained Earnings: Transactions and Statement The stockholders’ equity of Striker Corporation at January 1 appears below:...

Retained Earnings: Transactions and Statement The stockholders’ equity of Striker Corporation at January 1 appears below: Common stock, $10 par value, 300,000 shares authorized; 105,000 shares issued and outstanding $800,000 Paid-in capital in excess of par value 480,000 Retained earnings 305,000 During the year, the following transactions occurred: May 12 Declared a 9 percent stock dividend; market value of the common stock was $21 per share. June 6 Issued the stock dividend declared on May 12. Dec. 5 Declared a...

Franklin Inc. has no retained earnings and expects to pay out all of its earnings as...

Franklin Inc. has no retained earnings and expects to pay out all of its earnings as dividends in the future. Now the company uses the CAPM to calculate its cost of equity, its target capital structure consists of common stock, preferred stock, and debt. Which of the following events would INCREASE its weighted average cost of capital (WACC), except: a. The market risk premium increases b. The company’s beta is higher than the benchmark in the industry due to a...

For an MNC, a source of equity includes retained earnings a global equity offering a domestic...

For an MNC, a source of equity includes retained earnings a global equity offering a domestic equity offering All of these are sources of equity for an MNC.

11. What is the amount of total paid - in capital and total retained earnings? Prefered...

11. What is the amount of total paid - in capital and total retained earnings? Prefered stock - $ 270,000 Paid in capital excess of par - preferred - $ 32,000 Common stock - $242,000 Paid in capital excess of par - common - $80,000 retained earnings - $183,000 12. A corporation originally issued $5 par common stock for $10 per share. What is the journal entry to record the purchase of 200 shares of their own stock for $8...

Question