User Account

All Pages

Calculate stock dividend shares and cash dividend

Assignment Help Financial Accounting
Reference no: EM13328491

Question 1: Bonds payable calculate issue price and amortize premium On January 1, 2013, Learned, Inc., issued $90 million face amount of 20-year, 14% stated rate bonds when market interest rates were 16%. The bonds pay interest semiannually each June 30 and December 31 and mature on December 31, 2032.

Required:

a. Using the present value tables in Chapter 6, calculate the proceeds (issue price) of Learned, Inc. s, bonds on January 1, 2013, assuming that the bonds were sold to provide a market rate of return to the investor.

b. Assume instead that the proceeds were $93,000,000. Use the horizontal model (or write the journal entry) to record the payment of semiannual interest and the related premium amortization on June 30, 2013, assuming that the premium of $3,000,000 is amortized on a straight-line basis.

c. If the premium in part b were amortized using the compound interest method, would interest expense for the year ended December 31, 2013, be more than, less than, or equal to the interest expense reported using the straight-line method of premium amortization? Explain.

d. In reality, the difference between the stated interest rate and the market rate would be substantially less than 2%. The dramatic difference in this problem was designed so that you could use present value tables to answer part a. What causes the stated rate to be different from the market rate, and why is the difference likely to be much less than depicted in this problem?

Question 2: Calculate stock dividend shares and cash dividend amounts Assume that you own 4,000 shares of Blueco, Inc. s, common stock and that you currently receive cash dividends of $0.84 per share per year.

Required:

a. If Blueco, Inc., declared a 5% stock dividend, how many shares of common stock would you receive as a dividend?

b. Calculate the cash dividend per share amount to be paid after the stock dividend that would result in the same total cash dividend (as was received before the stock dividend).

c. If the cash dividend remained at $0.84 per share after the stock dividend, what per share cash dividend amount without a stock dividend would have accomplished the same total cash dividend?

d. Why would a company have a dividend policy of paying a $0.10 per share cash dividend and issuing a 5% stock dividend every year?

Reference no: EM13328491

Questions Cloud

Market price per share of common stock : Sold 9,000 shares of the treasury stock purchased in transaction d for $29 per share and declared a cash dividend of $3.50 per share on the preferred stock outstanding, to be paid early next year.
How much can phil afford to borrow to purchase a car : Phil can afford $200 a month for 5 years for a car loan. If the annual interest rate is 7.5 percent, how much can he afford to borrow to purchase a car
Calculate the number of shares of stock issued : Calculate the total amount of cash dividends paid in the fourth quarter and calculate the number of shares of stock issued in the stock dividend.
How much do need to have in the bank account today : Beginning three months from now, you want to be able to withdraw $2,100 each quarter from your bank account to cover college expenses over the next four years.
Calculate stock dividend shares and cash dividend : Calculate stock dividend shares and cash dividend amounts Assume that you own 4,000 shares of Blueco, Inc. s, common stock and that you currently receive cash dividends of $0.84 per share per year.
Prepare schedule of cost of goods manufactured in good form : Baba Company is a manufacturing firm that uses job-order costing. The company's inventory balances were as follows at the beginning and end of the year: Beginning Balance Ending Balance Raw materials
Calculate the density of planet hephaestus : While looking through the Mt. Palomar telescope, you discover a large planetary object orbited by a single moon. calculate the density of Planet Hephaestus
How much interest will be paid annually on these bonds : How much interest will be paid annually on these bonds and were the bonds issued at a premium or discount? Explain your answer
What is the pressure at the interface : A bucket is filled with a combination of water (density 1000 kg/m3) and oil (density 700 kg/m3). what is the pressure at the interface between the oil and the water

Reviews

Write a Review

Financial Accounting Questions & Answers

  Why is money laundering considered a criminal activity

Why is money laundering considered a serious criminal activity if it only involves the transfer of money from one location to another? Are financial institutions the only organizations used to detect and combat money laundering activities? Name ano..

  Expalin how might it do so without being currently taxed

A U.S. manufacturer wants to conduct business through a foreign subsidiary organized in a low tax jurisdiction. Expalin how might it do so without being currently taxed on the subsidiary's foreign earnings?

  Evaluate the net advantage to leasing

Finding Economic ordering Quantity - evaluate the net advantage to leasing. (Problem requires MARCS tables.)

  Method advocated by proponents of the net-of-tax method

For disclosing the periodic income tax expense on the income statement, one method advocated by proponents of the net-of-tax method theorize that this method should report

  Case for global accounting standards

"The case for global accounting standards" by Professor Ann Tarca (UWA) and analyse what the key points are of the report. Then prepare a report either supporting or challenging the position of the author.

  Show labeled computations for amount of income tax payable

Prepare a journal entry to record income taxes for the year 2008. Show labeled computations for the amount of income tax payable and the change in the deferred tax account.

  Illustrate total cost to be accounted

During the month, the cost of units transferred out from the dept. was $460,000. In the departments cost reconciliation report for April, the total cost to be accounted for would be?

  Explain the difference in operating income

Explain the difference in operating income for January and February and March under variable costing and absorption costing

  What is present value to be received

What is present value of $2,500 to be received at the beginning of each of 30 periods, discounted at 10% compound interest?

  Net cash flow to change either positively or negatively

The net cash flow to change either positively or negatively - Detemination of how much the depreciation change cause

  Mortgages and deeds of trust related to one another

What does it seem for liability on a negotiable instrument to be secondary liability and How are mortgages and deeds of trust related to one another

  Explain selling and administrative expenses budget

Selling and administrative expenses budget

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd