Doug Graves Cemetery had 53,000 shares of common stock issued and outstanding at January 1, 2021. During 2021, Graves took the following actions: June 1 Declared a 2-for-1 stock split, when the fair value of the stock was $28 per share. October 15 Declared a $0.40 per share cash dividend. In Graves's statement of shareholders' equity for 2021, what amount should Graves report as dividends

Question

Gunnar Hudson

Business

13 September, 02:50

Doug Graves Cemetery had 53,000 shares of common stock issued and outstanding at January 1, 2021. During 2021, Graves took the following actions: June 1 Declared a 2-for-1 stock split, when the fair value of the stock was $28 per share. October 15 Declared a $0.40 per share cash dividend. In Graves's statement of shareholders' equity for 2021, what amount should Graves report as dividends

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Answers (1)

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Raymond · Answer 1

The answer is given below;

Explanation:

Revised Stocks = 53,000*2=106,000

Dividend per share=106,000*.4=$42,400

The $42,400 will be reported as dividend as the number of shares outstanding have doubled due to stock split.