Lea Inc, owned 900,000 shares of Mia Corporation stock. On December 31, 2010, when Lea's account "Investment in Common Stock of Mia Corporation" has a carrying value of P5 per share, Lea distributed these shares to its stockholders as a dividend. Lea originally paid P8 for each share. Lea has 300,000 shares issued and outstanding, which are traded on a national stock exchange. The quoted market price for a Mia share was P7 on the declaration date and P9 on distribution date. What would be the reduction in Lea's stockholder's equity as a result of the above transactions? Group of answer choices A. P3,600,000 B. P7,200,000 C. P2,100,000 D.P4,500,000
Lea Inc, owned 900,000 shares of Mia Corporation stock. On December 31, 2010, when Lea's account "Investment in Common Stock of Mia Corporation" has a carrying value of P5 per share, Lea distributed these shares to its stockholders as a dividend. Lea originally paid P8 for each share. Lea has 300,000 shares issued and outstanding, which are traded on a national stock exchange. The quoted market price for a Mia share was P7 on the declaration date and P9 on distribution date. What would be the reduction in Lea's stockholder's equity as a result of the above transactions? Group of answer choices A. P3,600,000 B. P7,200,000 C. P2,100,000 D.P4,500,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 9P: Comprehensive Young Corporation has been operating successfully for several years. It is authorized...
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Lea Inc, owned 900,000 shares of Mia Corporation stock. On December 31, 2010, when Lea's account "Investment in Common Stock of Mia Corporation" has a carrying value of P5 per share, Lea distributed these shares to its stockholders as a dividend. Lea originally paid P8 for each share. Lea has 300,000 shares issued and outstanding, which are traded on a national stock exchange. The quoted market price for a Mia share was P7 on the declaration date and P9 on distribution date.
What would be the reduction in Lea's stockholder's equity as a result of the above transactions?
Group of answer choices
A. P3,600,000
B. P7,200,000
C. P2,100,000
D.P4,500,000
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