The balance sheet of Freedom Company included the following shareholders' equity accounts at December 31,...
80.2K
Verified Solution
Link Copied!
Question
Accounting
The balance sheet of Freedom Company included the following shareholders' equity accounts at December 31, 2018: 300,000 Paid-in capital: Common stock, 300,000 shares at $1 par Paid-in capital --- excess of par Retained earnings 2,475,000 8,045,000 Total shareholders' equity $10,820,000 On May 3, 2019, a 5-for-4 stock split was declared and distributed. The stock split was effected in the form of a 25% stock dividend. The market value of the $1 par common stock was $10 per share. On July 5, 2019, a 4% common stock dividend was declared and distributed. The market value of the common stock was $12 per share. On December 1, 2019, the board of directors declared a cash dividend of $0.40 per share on its common shares, payable on December 28 to shareholders. Assuming net income is $700,000 for year 2019 and large stock dividend does not affect retained earnings, what is the balance of retained earnings shown on December 31, 2019 balance sheet? $8,709,000. $8,612,000. $8,545,000. $8,409,000
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
