Question

At the end of 2010, washington corporation reported a $40,000 balance in its common stock account (par value $1 per share). the treasury stock account balance was $720 (cost $6 per share). during 2010, the company declared and paid a cash dividend at $1.50 per share. calculate the total amount of the 2010 cash dividend.

Answer 1

Calculation of Cash Dividend;

It is given that at the end of 2010, Washington corporation reported a $40,000 balance in its common stock account (par value $1 per share) and the treasury stock account balance was $720 (cost $6 per share). It means the number of equity shares outstanding were 40,000 – (720/6) = 39,880 Shares

Further we are given that during 2010, the company declared and paid a cash dividend at $1.50 per share.

Hence,  the total amount of the 2010 cash dividend shall be 39,8880 shares * $1.50 = $59,820