Questions: The following transactions and events affected its equity during the year. January 5 Declared a 0.50 per share cash dividend, date of record January 10. March 20 Purchased treasury stock for cash. April 5 Declared a 0.50 per share cash dividend, date of record April 10. July 5 Declared a 0.50 per share cash dividend, date of record July 10. July 31 Declared a 20% stock dividend when the stock's market value was 12 per share. August 14 Issued the stock dividend that was declared on July 31. October 5 Declared a 0.50 per share cash dividend, date of record October 10. Required: 1. How many common shares are outstanding on each cash dividend date?

Solution Steps

To determine the number of common shares outstanding on each cash dividend date, we need to consider the initial number of shares and account for any changes due to stock dividends or treasury stock purchases. We will start with the initial number of shares, adjust for the stock dividend, and then check the number of shares on each cash dividend date.

We start with an initial number of shares: \[ \text{Initial shares} = 1000 \]

The cash dividend dates are:

• January 5
• April 5
• July 5
• October 5

A \(20\%\) stock dividend is declared on July 31. This increases the number of shares by: \[ \text{Stock dividend} = 1000 \times \frac{20}{100} = 200 \] Thus, the total number of shares after the stock dividend is: \[ \text{Shares after stock dividend} = 1000 + 200 = 1200 \]

There is no treasury stock purchase mentioned, so: \[ \text{Treasury stock purchase} = 0 \]

• On January 5: \[ \text{Number of shares} = 1000 \]
• On April 5: \[ \text{Number of shares} = 1000 \]
• On July 5: \[ \text{Number of shares} = 1000 \]
• On October 5: \[ \text{Number of shares} = 1200 \]

Final Answer