Corporate Financial Accounting
Corporate Financial Accounting
15th Edition
ISBN: 9781337398169
Author: Carl Warren, Jeff Jones
Publisher: Cengage Learning
bartleby

Videos

Question
Book Icon
Chapter 12, Problem 12.4TIF
To determine

Cash dividends: The amount of cash provided by a corporation out of its distributable profits to its shareholders as a return for the amount invested by them is referred as cash dividends.

To write: A memo to the chairman of the board of Incorporation MD, explaining the factors before deciding whether to declare a cash dividend for the last quarter of 20Y8.

Blurred answer
Students have asked these similar questions
Motion Designs Inc. has paid quarterly cash dividends since 20Y7. These dividends have steadily increased from $0.05 per share to the latest dividend declaration of $0.50 per share. The board of directors would like to continue this trend and is hesitant to suspend or decrease the amount of quarterly dividends. Unfortunately, sales dropped sharply in the fourth quarter of 20Y8 due to worsening economic conditions and increased competition. As a result, the board is uncertain as to whether it should declare a dividend for the last quarter of 20Y8. On October 1, 20Y8, Motion Designs Inc. borrowed $4,000,000 from Valley National Bank to use in modernizing its retail stores and to expand its product line in response to changes in its industry. The terms of the 10-year, 6% loan require Motion Designs to do the following: • Pay monthly interest on the last day of the month • Pay $400,000 of the principal each October 1, beginning in 20Y9 • Maintain a current ratio (current assets ÷ current…
Motion Designs Inc. has paid quarterly cash dividends since 20Y7. These dividends have steadily increased from $0.05 per share to the latest dividend declaration of $0.50 per share. The board of directors would like to continue this trend and is hesitant to suspend or decrease the amount of quarterly dividends. Unfortunately, sales dropped sharply in the fourth quarter of 20Y8 due to worsening economic conditions and increased competition. As a result, the board is uncertain as to whether it should declare a dividend for the last quarter of 20Y8.On October 1, 20Y8, Motion Designs Inc. borrowed $4,000,000 from Valley National Bank to use in modernizing its retail stores and to expand its product line in response to changes in its industry. The terms of the 10-year, 6% loan require Motion Designs to do the following:• Pay monthly interest on the last day of the month• Pay $400,000 of the principal each October 1, beginning in 20Y9• Maintain a current ratio (current assets ÷ current…
Blanket Company has paid quarterly dividends every quarter for the past 15 years. Lately, slowing sales have created a cash crunch for the company. While the company still has positive retained earnings, the retained earnings balance is close to zero. Should the company borrow to continue to pay dividends? Why or why not? a. Yes – discontinuing a previously regular dividend is very bad for public relations. b. Yes – best to keep stockholders happy and prevent a sell-off. c. No – borrowing will involve interest expense and will have to be repaid. d. No – it is illegal to pay a dividend that makes retained earnings negative.

Chapter 12 Solutions

Corporate Financial Accounting

Ch. 12 - Dividends per share Zero Calories Company has...Ch. 12 - Entries for issuing stock On January 22, Zentric...Ch. 12 - Prob. 12.3BECh. 12 - Prob. 12.4BECh. 12 - Entries for treasury stock On May 27, Hydro...Ch. 12 - Reporting stockholders equity Using the following...Ch. 12 - Statement of stockholders equity None Cruises Inc....Ch. 12 - Earnings per share Financial statement data for...Ch. 12 - Preferred stock, 1st year 0.85 Dividends per share...Ch. 12 - Prob. 12.2EXCh. 12 - Prob. 12.3EXCh. 12 - Prob. 12.4EXCh. 12 - Issuing stock for assets other than cash On...Ch. 12 - Selected stock transactions Alpha Sounds Corp., an...Ch. 12 - Issuing stock Willow Creek Nursery, with an...Ch. 12 - Issuing stock Professional Products Inc., a...Ch. 12 - Entries for cash dividends The declaration,...Ch. 12 - Entries for stock dividends Healthy Life Co. is an...Ch. 12 - Prob. 12.11EXCh. 12 - Effect of cash dividend and stock split Indicate...Ch. 12 - Selected dividend transactions, stock split...Ch. 12 - Prob. 12.14EXCh. 12 - Treasury stock transactions SprayCo Inc. develops...Ch. 12 - Prob. 12.16EXCh. 12 - Reporting paid-in capital The following accounts...Ch. 12 - Stockholders Equity section of balance sheet The...Ch. 12 - Stockholders Equity section of balance sheet...Ch. 12 - Retained earnings statement Sumter Pumps...Ch. 12 - Stockholders Equity section of balance sheet List...Ch. 12 - Prob. 12.22EXCh. 12 - Prob. 12.1APRCh. 12 - Prob. 12.2APRCh. 12 - Selected stock transactions The following selected...Ch. 12 - Prob. 12.4APRCh. 12 - Entries for selected corporate transactions...Ch. 12 - Common dividends in 20Y3: 25,000 Dividends on...Ch. 12 - Stock transaction for corporate expansion Pulsar...Ch. 12 - Selected stock transactions Diamondback Welding ...Ch. 12 - Prob. 12.4BPRCh. 12 - Entries for selected corporate transactions West...Ch. 12 - Comprehensive Problem 4 2. c. Total assets....Ch. 12 - Prob. 12.1MADCh. 12 - Analyze and compare Bank of America and Wells...Ch. 12 - Prob. 12.3MADCh. 12 - Prob. 12.4MADCh. 12 - Analyze and compare BBT and Regions Financial BBT...Ch. 12 - Ethics In Action Tommy Gunn is a division manager...Ch. 12 - Ethics in Action Lou Hoskins and Shirley Crothers...Ch. 12 - Prob. 12.4TIF
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT
Text book image
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License