Jay-Cee Corporation had 20,000 shares of $4 par value common stock outstanding on January 1.On January 20,the company purchased 2,000 of its stock for $16 per share.On July 3,the company reissued 1,000 of the shares at $20 per share.Jay-Cee uses the cost method to account for its treasury stock.Assume the company paid a dividend of $5 per share on August 3.What is the total amount of the dividends that would be paid to the common stockholders?
A) $95,000
B) $100,000
C) $90,000
D) $76,000

Question

Quizplus · Accepted Answer

The company had 20,000 shares outstanding, repurchased 2,000 shares, leaving 18,000 shares. They reissued 1,000 shares, resulting in 19,000 shares outstanding. Dividends are paid on outstanding shares: 19,000 shares x $5 = $95,000.

Jay-Cee Corporation Had 20,000 Shares of $4 Par Value Common