Question

ABC issued 12,000 shares and subsequently reacquired 2,000 shares as treasury stock. The following year, ABC Corporation declared a regular dividend of $2 per share. What would be the total amount of the dividend expense

Answer 1

Dividend expense will be $20000

Step-by-step explanation:

We have given share used = 12000 shares

And Treasury stock = 2000 shares

It is given a regular dividend of $2 per share

We have to find the dividend stock

Outstanding share = Share used - treasury stock = 12000 - 2000 = 10000 shares

So dividend expense = $2×10000 = $20000

So dividend expense will be $20000