Jones Company has 200,000 shares authorized, 150,000 shares issued, and 25,000 shares of Treasury stock on January 1. On March 1, they declared a 15% stock dividend. The company then declared a $0.35 per share cash dividend.
What is the amount of dividends payable?

Question

Quizplus · Accepted Answer

The correct answer is A.The stock dividend increases the number of shares outstanding by 15%, from 150,000 to 172,500. The cash dividend is $0.35 per share, so the total cash dividend is $0.35 * 172,500 = $60,375. The total dividends payable is the sum of the stock dividend and the cash dividend, which is $50,313.

Jones Company Has 200,000 Shares Authorized, 150,000 Shares Issued, and 25,000