The declaration and issuance of a stock dividend larger than 25% of the shares previously outstanding

Business

1 answer:

lord [1]3 years ago

4 0

Answer:

b. decreases retained earnings but does not change total stockholders' equity.

Explanation:

a. increases common stock outstanding and increases total stockholders' equity.

FALSE: The Equity does not change as the Retained Earnings are used to issue the Shares, so no change in the total Stockholders Equity

d. increases retained earnings and increase total stockholders' equity.

FALSE: The retained earnings are debited thus, decrease when declaring dividends

c. may increase or decrease paid-in capital above par but do not change total

stockholders' equity.

FALSE: paid in will increase or not be used, as the shares will have a minimum value for the company of his face value.

b. TRUE RE decrease as from there comes to the funds. The total SE does not change it change his composition.

You might be interested in

Answer following question with true or false and explain.A firm's profit margin is 5%, its debt/assets ratio is 56%, and its div

maria [59]

Answer:

False

Explanation:

As a company's sales level increases, its current assets will increase, e.g. cash, inventories, accounts receivables increase. generally, also the fixed assets increase, specially if the firm was previous producing at full capacity even before total sales increased. But as sales increase, not only do the company's assets increase, its current liabilities generally increase also, and its profits should increase. In this case, 60% of the company's profits are reinvested in the company, and the liabilities represent more than half of the total assets. Therefore, it is possible that the company needs external financing, but it is also possible that it doesn't. You cannot assume that the company will necessarily need external financing, because retained earnings and the increase in current liabilities might be enough to finance the company's growth in sales.

8 0

3 years ago

Harrison Corporation is studying a project that would have an eight-year life and would require a $300,000 investment in equipme

zheka24 [161]

Answer:

The payback period for this project is closest to 2 years

Explanation:

Initial investment = $300,000

Sales = $500,000

Cash variable expenses = ($200,000)

Contribution margin = 300,000

Fixed cash expenses = $150,000