Question

True Financial corporation is a financial services holding company headquartered in ithaca new york, that offers banking insurance and wealth management service. It pays cash dividends quarterly and also issues stock dividends periodically.

1. At March 31, 2012, True had 9,726,700 shares issued with a par value of $7.00 per share and $75,00 share held in treasury. On April 25, 2012, the company announced that its Board of Directors approved payment of a regular quarterly cash dividend of 3.50 per share , payable on May 15, 2012, to common shareholder of record on May 7,2012. Assume no shares were acquired or sold by the company after March 31. Give the journal entry to record the declaration of the cash dividend.

2. At December 31, 2009, True reported 5,918,200 shares issued with a par value of $7.00 per share and 11,200 share held in treasury. On January 27,2010, the company announced that its board of directors approved payment of a regular quarterly cash dividend of $3.60 per share, payable on February 25, 2010 to common shareholders of record on February 5, 2010. The board also approved the payment of 5% stock dividend distributable on February 25, 2010, to common shareholders of record on February 5, 2010. The share price was $50 when the stock dividend was issued. Assume no treasury shares were acquired or sold after June 30. Prepare the journal entry to record true 's stock dividend.

3. True issued 5% stock dividends in 1995, 2003, 2005, 2006, 2010. In 1998, True issued a three-for-one split. If an investor purchased 1,200 shares in 1994, how many shares would the investor have in 2012?

Answer 1