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Calculation of cost of common stock shares.

On Jan 4, 2007 Larsen Co purchased 5,000 shares of Warner Co for 59,500 plus a broker's fee of $1000. Warner Company has a total of 25,000 shares of common stock outstanding and it is presumed the Larsen Co will have significant influence over Warner. During each of the next two years, Warner declared and paid cash dividends of $0.85 per share and its net income was 72,000 and 67,000 for 2007 and 2008 respectively. The Jan 12, 2009 entry to record the sale of 3,000 shares of Warner Company stock for 39,000 cash should be:

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9161242

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