Problem: The annual report for Malibu Beachwear reported the following transacti

Question

Problem:
The annual report for Malibu Beachwear reported the following transactions affecting stockholders' equity:

a. Purchased $3.5 million in treasury stock.
b. Declared and paid cash dividends in the amount of $254.2 million.
c. Issued 100 percent common stock dividend involving 222.5 million additional shares with a total par value of $556.3 million.

Requirement: Prepare a journal entry for the above transactions.

My Quesiton:

I just need the journal entry for PART C. I know how to do the other parts. Also could someone please explain what C is saying?

Thank you.

Guru thanks for the answer however this question is stated as it is stated in the book I have not included my answer I was just asking for the journal entry for part C.

Explanation / Answer

c. Issued 100 percent common stock dividend involving 222.5 million additional shares with a total par value of $556.3 million. The above statement wants to convey that stock dividend has beed declared, and 222.5 million shares have been issued having par value of 556.3 million. In this question par value per share comes to 556.3 / 222.5 = $2.50022... , which does not seem to be correct. Please check your question again. However the entry will be: Retained earnings debit $556.3 million Stock dividend credit $556.3 million Stock dividend debit $556.3 million Common stock credit $556.3 million

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