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12 June, 17:14

A corporation has issued 30,000 shares of $50 par common stock and holds 5,000 of these shares as treasury stock. If the corporation declares a $1 per share cash dividend, what amount will be recorded as cash dividends?

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  1. 12 June, 19:22
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    The amount of $25,000 will be recorded as the Cash Dividends

    Explanation:

    The amount which is to be recorded as the cash dividend is computed as:

    Cash Dividend = Number of Shares * Rate per share

    where

    Number of shares is computed as:

    Number of shares = Issued Shares - Treasury Stock

    = 30,000 - 5,000

    = 25,000

    NOTE: No dividend is paid on treasury stocks, so the the shares of the treasury stocks are subtracted.

    Rate per share is $1

    SO, Putting the values above:

    Cash Dividend = 25,000 * $1

    = $25,000
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Home » Business » A corporation has issued 30,000 shares of $50 par common stock and holds 5,000 of these shares as treasury stock. If the corporation declares a $1 per share cash dividend, what amount will be recorded as cash dividends?
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