Presented below is information related to Putnam Corporation at December 31, 201
ID: 2610998 • Letter: P
Question
Presented below is information related to Putnam Corporation at December 31, 2018:
Common stock, $1 par value $3,840,000
Common stock dividend distributable 1,920,000
Paid in capital-common 7,400,000
Retained earnings 2,220,000
Treasury stock at cost (5,000 shares) 625,000
Net income for 2018 350,000
Cash dividends declared during 2018 75,000
In December, 2018, Putnam’s Board of Directors declared a 50% stock dividend on issued shares when the common stock was selling for $130 a share. The stock dividend will be distributed in January, 2019. What is total stockholders’ equity of Putnam at 12/31/18?
$14,905,000.
$16,005,000.
$14,680,000.
$15,030,000.
$14,755,000.
Explanation / Answer
Since the given event of declaring stock dividend will not alter total amount of stockholders equity, stock holders equity will remain at $15,030,000.
Commonstock,$1parvalue 38,40,000 Commonstockdividenddistributable 19,20,000 Paidincapital-common 74,00,000 Retainedearnings 22,20,000 Treasurystockatcost(5,000shares) -6,25,000 Netincomefor2018 3,50,000 Cashdividendsdeclaredduring2018 -75,000 Stockholders equity 1,50,30,000