Question
In: Accounting
The stockholders’ equity accounts of Bramble Corp. on January 1, 2017, were as follows. Preferred Stock...
The stockholders’ equity accounts of Bramble Corp. on January 1,
2017, were as follows.
| Preferred Stock (7%, $100 par noncumulative, 5,000 shares authorized) | $300,000 | |
| Common Stock ($4 stated value, 300,000 shares authorized) | 1,000,000 | |
| Paid-in Capital in Excess of Par Value—Preferred Stock | 15,000 | |
| Paid-in Capital in Excess of Stated Value—Common Stock | 480,000 | |
| Retained Earnings | 688,500 | |
| Treasury Stock (5,000 common shares) | 40,000 |
During 2017, the corporation had the following transactions and
events pertaining to its stockholders’ equity.
| Feb. | 1 | Issued 5,000 shares of common stock for $35,000. | |
| Mar. | 20 | Purchased 1,000 additional shares of common treasury stock at $8 per share. | |
| Oct. | 1 | Declared a 7% cash dividend on preferred stock, payable November 1. | |
| Nov. | 1 | Paid the dividend declared on October 1. | |
| Dec. | 1 | Declared a $0.40 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017. | |
| Dec. | 31 | Determined that net income for the year was $283,900. Paid the dividend declared on December 1. |
Calculate the payout ratio, earnings per share, and return on
common stockholders’ equity. (Round answers to 2
decimal places)
Solutions
Expert Solution
Solution:
Calculation of the Payout Ratio, Earnings Per Share and Return on common Stockholder's Equity:
Payout Ratio:
Therefore, the Payout Ratio is 35.08%.
Earnings Per Share:
Therefore, the Earnings Per Share is $1.06.
Return on Common Stockholders Equity:
Therefore, the Return on Common Stockholder's Equity is 11.85%.
ekkarill92 answered 1 year agoRelated Solutions
The stockholders’ equity accounts of Bramble Corp. on January 1, 2017, were as follows. Preferred Stock...
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