In: Accounting
The following information is from 2019 statement of stockholders' equity for Katy Inc.
Stockholders' equity (in millions, except shares) |
2016 |
2015 |
||
Series A 5.375% mandatory convertible preferred stock |
$ 400 |
$ 400 |
||
Common stock, par value $0.01 (128,626,740 shares issued 2019; 128,228,477 shares issued 2018) |
1 |
1 |
||
Additional paid-in capital |
3,547 |
3,187 |
||
Accumulated other comprehensive income, net of tax |
21 |
19 |
||
Accumulated deficit |
(1,927 |
) |
(686 |
) |
Total Dynegy stockholders' equity |
2,042 |
2,921 |
||
Noncontrolling interest |
(3 |
) |
(2 |
) |
Total equity |
$2,039 |
$2,919 |
Dynegy has 420 million shares of common stock authorized. Assume
the following transactions occurred during the 2019.
Mar 10 |
Declare and pay a cash dividend of $2.00 per share |
May 6 |
Split stock 2-for-1 reducing the par value of the stock to $0.005 |
Aug 25 |
Issue a large stock dividend of 80% of the outstanding shares of common stock |
Required:
a. |
Use the financial statement effects template below to record the three transactions. |
b. |
How did the cash dividend affect the company's profitability for the year? |
c. |
What effects does the stock split have on Dynegy's financial statements? |
d. |
What effects does the stock split have on an individual stockholder? |
Balance Sheet |
Income Statement |
Transaction |
Cash Asset |
+ |
Noncash Assets |
= |
Liabil- ities |
+ |
Contrib. Capital |
+ |
Earned Capital |
Revenues |
– |
Expenses |
= |
Net Income |
|||
Mar 10 |
= |
– |
= |
||||||||||||||
May 6 |
= |
– |
= |
||||||||||||||
Aug 25 |
= |
– |
= |