In the Space Provided,indicate the Effect of the Dividend Transactions

question 100

Essay

In the space provided,indicate the effect of the dividend transactions on each account listed by writing the amount and whether the account would be increased or decreased.The company has 10,000 shares of $1 par value common stock authorized and 8,000 shares issued.In instances where there is no effect on that account,place an X in the box.
$$\begin{array} { | l | l | l | l | l | } \hline { \text { Item } } & \begin{array} { l } \text { Common } \\\text { Common } \\\text { Stock }\end{array} & \begin{array} { l } \text { Stock } \\\text { Dividend } \\\text { Distributable }\end{array} & \begin{array} { l } \text { Paid-In } \\\text { Capital- } \\\text { Common }\end{array} & \begin{array} { l } \text { Retained } \\\text { Earnings }\end{array} \\\hline \text { a. } \quad \begin{array} { l } \text { May 1, declared cash dividend } \\\text { totaling } \$ 2,000 .\end{array} & & & & \\\hline \text { b. } \quad \begin{array} { l } \text { May 15, paid the cash dividend } \\\text { declared on May } 1 .\end{array} & & & & \\\hline \text { c. } \quad \begin{array} { l } \text { May 25, declared a 10\% stock } \\\text { dividend when the market price } \\\text { of the stock was } \$ 8 .\end{array} & & & & \\\hline \text { d. } \begin{array} { l } \text { May 30, distributed the stock } \\\text { dividend. }\end{array} & & & & \\\hline \text { e. } \quad \begin{array} { l } \text { June } 15 , \text { declared a 2-for-1 stock } \\\text { split. }\end{array} & & & & \\\hline\end{array}$$

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Definitions:

Gross Margin Percentage

The portion of sales revenue that exceeds the cost of goods sold, expressed as a percentage, indicating the financial health of product sales.

Net Profit Margin Percentage

A financial metric that shows the percentage of revenue remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from total sales.

Contribution Margin

The amount remaining from sales revenues after all variable expenses have been deducted.

Gross Margin Percentage

The portion of each dollar of revenue that a company retains as gross profit, calculated as gross profit divided by total revenue.