Ask Question
27 December, 17:04

Hernandez Company has 560,000 shares of $10 par value common stock outstanding. During the year, Hernandez declared a 10% stock dividend when the market price of the stock was $30 per share. Four months later Hernandez declared a $.50 per share cash dividend. As a result of the dividends declared during the year, retained earnings decreased by

+1
Answers (1)
  1. 27 December, 17:10
    0
    RE decrease: 1,960,000

    Explanation:

    Retained earnings will decrease for the total amount of the dividends.

    stocks dividends

    560,000 shares

    10% stock dividends: 560,000 x 10% = 56,000 shares

    56,000 x $30 = 1,680,000 stock dividends

    cash dividends:

    560,000 x 0.50 per share = 280,000 cash dividends

    Total dividends: 1,680,000 + 280,000 = 1,960,000

    that will be the RE decrease
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Hernandez Company has 560,000 shares of $10 par value common stock outstanding. During the year, Hernandez declared a 10% stock dividend ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers