Hernandez Company has 350,000 shares of $10 par value common stock outstanding. During the year, Hernandez declared a 10% stock dividend when the market price of the stock was $30 per share. Four months later Hernandez declared a $.50 per share cash dividend. As a result of the dividends declared during the year, retained earnings decreased by:. a. $1,242,500.
b. $525,000.
c. $192,500.
d. $175,000.

b. $525,000.

Explanation:

Dividends distributions are always made out of the distributable profits found in the Retained Earnings.

The first step thus is to calculate the amount of dividends distributed.

1st Declaration :

Dividends = 350,000 shares x $10 x 10% = $350,000

2nd Declaration :

Dividends = 350,000 shares x $0.50 = $175,000

Therefore,

Total Dividends = $350,000 + $175,000 = $525,000

Conclusion :

As a results of the dividends distribution, retained earnings decreased by $525,000.

a manufacturer of printed circuit boards uses exponential smoothing with trend to forecast monthly demand of its product. at the end of december, the company wishes to forecast sales for january. the estimate of trend through november has been 200 additional boards sold per month. average sales have been around 1000 units per month. the demand for december was 1100 units. the company uses α = 0.20 and β = 0.10. make a forecast including trend for the month of january.

answerup to (3) three years;