Chapter 11.
Dividend rate formula
# of shares x rate (%) x par
How to calculate stock dividends
1) Common stock outstanding / par value 2) Get total number of shares 3) Add any additional shares 4) Multiply by the rate = total shares 5) Total shares x market value = stock dividends
How to calculate cash dividends and dividends payable:
Add dividends x dividend per share
Payout ratio
Cash dividends declared on common stock / net income
When there is no-par value, you..?
Debit: Cash Credit: Common stock
On June 1, Kingbird, Inc. issues 3,200 shares of no-par common stock at a cash price of $6 per share.
Debit: Cash (19200) Credit: Common stock (19200)
On May 10, Bramble Corp. issues 3,400 shares of $6 par value common stock for cash at $15 per share.
Debit: Cash (51000) Credit: Common stock (20400) Credit: Paid-in Capital in Excess of Par Value-Common Stock (30600)
Metlock, Inc. issues 7,800 shares of $103 par value preferred stock for cash at $110 per share.
Debit: Cash (858000) Credit: Preferred stock (803400) Credit: Paid-in Capital in Excess of Par Value-Preferred Stock (54600)
Riverbed Corp has 8,400 shares of common stock outstanding. It declares a $5 per share cash dividend on November 1 to stockholders of record on December 1. The dividend is paid on December 31.
Declaration date: Debit: Cash Dividends (42000) Credit: Dividends payable (42000) Payment date: Debit: Cash dividends (42000) Credit: Cash (42000)
To find the stated value of the common stock you..?
Dollar amount / shares issued
To find the par value of the preferred stock you...?
Dollar amount / shares issued and outstanding
How do you find cash?
Multiple shares x cash per share
How do you find common stock and preferred stock?
Multiple shares x par value common stock
Return on common stockholder's equity ratio
Net income - preferred dividends / average common stockholders equity
To find Common stock outstanding you..?
Shares issued - treasury stocks
How do you find Paid-in Capital in Excess of Par Value-Common Stock and the Paid-in Capital in Excess of Par Value-Preferred Stock?
Take the difference between cash per share and par value common stock and times that by number of shares to get your total number.
How to calculate Paid-in Capital in Excess of Par Value-Common Stock
The difference between stock dividends and common Stock Dividends Distributive
The preferred stock is cumulative, and the company did not pay a dividend in each of the two previous years.
The dividend paid to preferred stockholders : (Total shares x $102 par value preferred stock outstanding x 0.09) x 3 The dividend paid to common stockholders : 120000-71604 = 48396 (The dividend paid to common stockholders)
The preferred stock is noncumulative, and the company has not missed any dividends in previous years.
The dividend paid to preferred stockholders: (Total shares x $102 par value preferred stock outstanding x 0.09) The dividend paid to common stockholders : $120,000 cash dividend - The dividend paid to preferred stockholders = 96132 (The dividend paid to common stockholders)
How to calculate Common Stock Dividends Distributive
Total number of shares x par
Is stated value the same thing as par value?
Yes, calculate it the same way as well. You will get the same answer
