Chapter 11.

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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


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