To reduce its stock price, Shriver Food Systems, Inc., declared and issued a 50

Question

To reduce its stock price, Shriver Food Systems, Inc., declared and issued a 50 percent stock dividend. The company has 730,000 shares authorized and 130,000 shares outstanding. The par value of the stock is $1 per share and the market value is $100 per share. Prepare the journal entry to record this large stock dividend.

To reduce its stock price, Shriver Food Systems, Inc., declared and issued a 50 percent stock dividend. The company has 730,000 shares authorized and 130,000 shares outstanding. The par value of the stock is $1 per share and the market value is $100 per share. Prepare the journal entry to record this large stock dividend.

Record the declaration of a 50 percent stock dividend on the 130,000 shares of stock outstanding with a par value of $1 per share.

Explanation / Answer

date

particular

debit

credit

Retained earning

65000

Common stock

65000

Total value of stock = oytstanding x percentage of stock issused xpar value

=130 000x50%x1=65000

date

particular

debit

credit

Retained earning

65000

Common stock

65000

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