Explanation about the main differences between a stock

Assignment Help Financial Accounting

Reference no: EM13356241

Explanation about the main differences between a stock dividend and a stock split.

On January 1, 2007, Frederiksen Inc.'s Stockhlders' Equity category appeared as follows:

Preferred stock, $80 par value, 7%
3000 shares issues and outstanding	$240,000
Common stock, $10 par value,
15,000 shares issued and outstanding	150,000
Additional paid-in capital-Preferred	60,000
Additional paid-in capital-Common	225,000
Total contributed capital	$675,000
Retained earnings	2,100,000
Total stockholders' equity	$2,775,000

The preferred stock is noncumulative and nonparticipating. During 2007, the following transactions occurred:
a)On March 1, declared a cash dividend of $16,800 on preferred stock. Paid the dividend on April 1.
b)On June 1, declared a 5% stock dividend on common stock. The current market price of the common stock was $18. The stock was issued on July 1.
c)On September 1, declared a cash dividend of $0.50 per share on the common stock; paid the dividend on October 1.
d)On December 1, issued a 2-for-1 stock split of common stock, when the stock was selling at $50 per share.

Question:

Write a paragraph that explains the difference between a stock dividend and a stock split.

Reference no: EM13356241

Questions Cloud

Calculation of discount rate of the lender and passing : calculation of discount rate of the lender and passing journal entries.notes payable - discount basis. on august 1 2009

Preparation of the cash flow statementthe following events : preparation of the cash flow statement.the following events occurred at handsome hounds grooming company during its

Preparation of income statement from the given : preparation of income statement from the given transactions.the following events occurred at handsome hounds grooming

Explanation about the main differences between a stock : explanation about the main differences between a stock dividend and a stock split.on january 1 2007 frederiksen inc.s

Disclosure of the balance sheet after the dividend issue : disclosure of the balance sheet after the dividend issue and stock split.on january 1 2007 frederiksen inc.stockhlders

Showing the effect on the stockholders equity accountson : showing the effect on the stockholders equity accounts.on january 1 2007 frederiksen inc. stockhlders equity category

Calculation the amount of gain or loss on sale of the fixed : calculation the amount of gain or loss on sale of the fixed assets.merton company purchased a building at a cost of

Capitalization or expensing the equipmentmerton company : capitalization or expensing the equipment.merton company purchased a building at a cost of 364000 on january 1

User Account

All Pages