The Howe Company's stockholders' equity account is as follows: LOADING... . The earnings available for common stockholders from this period's operations are $100,000, which have been included as part of the $2.1 million retained earnings. a. What is the maximum dividend per share that the firm can pay? (Assume that legal capital includes all paid-in capital.) b. If the firm has $140,000 in cash, what is the largest per-share dividend it can pay without borrowing? c. Indicate the accounts and changes, if any, that will result if the firm pays the dividends indicated in parts a and b. d. Indicate the effects of an $80,000 cash dividend on stockholders' equity. Question content area bottom Part 1 a. The maximum dividend per share that the firm can is $enter your response here. (Round to the nearest cent.) Part 2 b. If the firm has $140,000 in cash, the largest per-share dividend it can pay without borrowing is $enter your response here. (Round to the nearest cent.) Part 3 c. If the firm pays the dividends indicated in part a, cash will decrease by $enter your response here. (Round to the nearest dollar.) Part 4 If the firm pays the dividends indicated in part a, retained earnings will decrease by $enter your response here. (Round to the nearest dollar.) Part 5 If the firm pays the dividends indicated in part b, cash will decrease by $enter your response here. (Round to the nearest dollar.) Part 6 If the firm pays the dividends indicated in part b, retained earnings will decrease by $enter your response here. (Round to the nearest dollar.) Part 7 d. An $80,000 cash dividend will cause retained earnings will decrease by $enter your response here. (Round to the nearest dollar.) Part 8 Stockholders' equity will decrease by $80,000 to $enter your response here. (Round to the nearest dollar.)
The Howe Company's stockholders' equity account is as follows: LOADING... . The earnings available for common stockholders from this period's operations are $100,000, which have been included as part of the $2.1 million retained earnings. a. What is the maximum dividend per share that the firm can pay? (Assume that legal capital includes all paid-in capital.) b. If the firm has $140,000 in cash, what is the largest per-share dividend it can pay without borrowing? c. Indicate the accounts and changes, if any, that will result if the firm pays the dividends indicated in parts a and b. d. Indicate the effects of an $80,000 cash dividend on stockholders' equity. Question content area bottom Part 1 a. The maximum dividend per share that the firm can is $enter your response here. (Round to the nearest cent.) Part 2 b. If the firm has $140,000 in cash, the largest per-share dividend it can pay without borrowing is $enter your response here. (Round to the nearest cent.) Part 3 c. If the firm pays the dividends indicated in part a, cash will decrease by $enter your response here. (Round to the nearest dollar.) Part 4 If the firm pays the dividends indicated in part a, retained earnings will decrease by $enter your response here. (Round to the nearest dollar.) Part 5 If the firm pays the dividends indicated in part b, cash will decrease by $enter your response here. (Round to the nearest dollar.) Part 6 If the firm pays the dividends indicated in part b, retained earnings will decrease by $enter your response here. (Round to the nearest dollar.) Part 7 d. An $80,000 cash dividend will cause retained earnings will decrease by $enter your response here. (Round to the nearest dollar.) Part 8 Stockholders' equity will decrease by $80,000 to $enter your response here. (Round to the nearest dollar.)
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 66P
Related questions
Question
The Howe Company's stockholders' equity account is as follows:
The earnings available for common stockholders from this period's operations are $100,000, which have been included as part of the
retained earnings .
LOADING...
.$2.1
million a. What is the maximum dividend per share that the firm can pay? (Assume that legal capital includes all paid-in capital.)
b. If the firm has
$140,000
in cash, what is the largest per-share dividend it can pay without borrowing?c. Indicate the accounts and changes, if any, that will result if the firm pays the dividends indicated in parts a and
b.
d. Indicate the effects of an
$80,000
cash dividend on stockholders' equity.Question content area bottom
Part 1
a. The maximum dividend per share that the firm can is
$enter your response here.
(Round to the nearest cent.)Part 2
b. If the firm has
$140,000
in cash, the largest per-share dividend it can pay without borrowing is
$enter your response here.
(Round to the nearest cent.)Part 3
c. If the firm pays the dividends indicated in part
a,
cash
will decrease by
$enter your response here.
(Round to the nearest dollar.)Part 4
If the firm pays the dividends indicated in part
a,
retained
earnings will decrease by
$enter your response here.
(Round to the nearest dollar.)Part 5
If the firm pays the dividends indicated in part
b,
cash will decrease by
$enter your response here.
(Round to the nearest dollar.)Part 6
If the firm pays the dividends indicated in part
b,
retained
earnings will decrease by
$enter your response here.
(Round to the nearest dollar.)Part 7
d. An
$80,000
cash dividend will cause retained earnings will decrease by
$enter your response here.
(Round to the nearest dollar.)Part 8
Stockholders' equity will decrease by
$80,000
to
$enter your response here.
(Round to the nearest dollar.)
Transcribed Image Text:Dividend constraints The Howe Company's stockholders' equity account is as follows: E. The earnings available for common stockholders from this period's
operations are $100,000, which have been included as part of the $2.1 million retained earnings.
a. What is the maximum dividend per share that the firm can pay? (Assume that legal capital includes all paid-in capital.)
b. If the firm has $140,000 in cash, what is the largest per-share dividend it can pay without borrowing?
c. Indicate the accounts and changes, if any, that will result if the firm pays the dividends indicated in parts a and b.
d. Indicate the effects of an $80,000 cash dividend on stockholders' equity.
a. The maximum dividend per share that the firm can is $
(Round to the nearest cent.)
b. If the firm has $140,000 in cash, the largest per-share dividend it can pay without borrowing is $
(Round to the nearest cent.)
c. If the firm pays the dividends indicated in part a, cash will decrease by $
(Round to the nearest dollar.)
If the firm pays the dividends indicated in part a, retained earnings will decrease by $
(Round to the nearest dollar.)
If the firm pays the dividends indicated in part b, cash will decrease by $
(Round to the nearest dollar.)
If the firm pays the dividends indicated in part b, retained earnings will decrease by $
(Round to the nearest dollar.)
d. An $80,000 cash dividend will cause retained earnings will decrease by $
(Round to the nearest dollar.)
Stockholders' equity will decrease by $80,000 to $
(Round to the nearest dollar.)
Transcribed Image Text:Common stock (400,000 shares at $4 par)
Paid-in capital in excess of par
Retained earnings
$1,600,000
4,000,000
2,100,000
Total stockholders' equity
$7,700,000
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