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Dividend constraints The Howe Company's stockholders' equity account is as follows: . The earnings available for common stockholders from this perio operations are $100,000, which have been included as part of the $1.6 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 $160,000 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.

Dividend constraints The Howe Company's stockholders' equity account is as follows: . The earnings available for common stockholders from this perio operations are $100,000, which have been included as part of the $1.6 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 $160,000 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.

Managerial Accounting: The Cornerstone of Business Decision-Making
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 55E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...
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e Home Dividend constraints The Howe Company's stockholders' equity account is as follows: . The earnings available for common stockholders from this period's ase Options operations are $100,000, which have been included as part of the $1.6 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 $160,000 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. dar a. The maximum dividend per share that the firm can is $ (Round to the nearest cent.) b. If the firm has $160,000 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 naue the dvidende indicated in nart h ratained earninge wrill decreaee hy /Dund tn the noarnet dollar 1 Enter your answer in each of the answer boxes. P Type here to search inser
Transcribed Image Text:e Home Dividend constraints The Howe Company's stockholders' equity account is as follows: . The earnings available for common stockholders from this period's ase Options operations are $100,000, which have been included as part of the $1.6 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 $160,000 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. dar a. The maximum dividend per share that the firm can is $ (Round to the nearest cent.) b. If the firm has $160,000 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 naue the dvidende indicated in nart h ratained earninge wrill decreaee hy /Dund tn the noarnet dollar 1 Enter your answer in each of the answer boxes. P Type here to search inser
Tor common stockholde which have been included as part of the $1.6 million retained earnings. dividend per share that the firm can pay? (Assume that legal capital includes all paid-in capital.) 00 in cash, what is the largest per-share dividend it can pay without borrowing? and changes an $80,000 Data Table nd per share 00 in cash, th Common stock (400,000 shares at $7 par) Paid-in capital in excess of par Retained earnings $2,800,000 2,000,000 1,600,000 vidends indica Total stockholders' equity $6,400,000 ends indicated ends indicated Print Done ende indicater ach of the answer boxes.
Transcribed Image Text:Tor common stockholde which have been included as part of the $1.6 million retained earnings. dividend per share that the firm can pay? (Assume that legal capital includes all paid-in capital.) 00 in cash, what is the largest per-share dividend it can pay without borrowing? and changes an $80,000 Data Table nd per share 00 in cash, th Common stock (400,000 shares at $7 par) Paid-in capital in excess of par Retained earnings $2,800,000 2,000,000 1,600,000 vidends indica Total stockholders' equity $6,400,000 ends indicated ends indicated Print Done ende indicater ach of the answer boxes.
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