The Western Pipe Company has the following capital section in its balance sheet.
ID: 2621566 • Letter: T
Question
The Western Pipe Company has the following capital section in its balance sheet. Its stock is currently selling for $6 per share.Common stock (55,000 shares at $2 par) $ 110,000 Capital in excess of par 110,000 Retained earnings 280,000 $ 500,000
The firm intends to first declare a 10 percent stock dividend and then pay a 15-cent cash dividend (which also causes a reduction of retained earnings).
Show the capital section of the balance sheet after the first transaction and then after the second transaction. (Omit the "$" sign in your response.)
WESTERN PIPE CO. After 1st transaction Common stock $ Capital in excess of par Retained earnings $
WESTERN PIPE CO. After 2nd transaction Common stock $ Capital in excess of par Retained earnings $ The Western Pipe Company has the following capital section in its balance sheet. Its stock is currently selling for $6 per share.
Explanation / Answer
1. Common stock (60,500@2) 121,000
Capital in excess of par 132,000
Retained earnings 247,000
Total 500,000
2. Common Stock 121,000
Capital in excess of par 132,000
Retained earnings 237,925
Total 490,925