- Stock Dividends KCE Shuttles Corporation is publicly traded airport transporta

Question

- Stock Dividends

KCE Shuttles Corporation is publicly traded airport transportation services company operating at 500 major airports globally. Prior to any stock declarations KCE Shuttles equity consisted of the following:

KCE Shuttles Corporation Original Capital Structure :

Common stock, $3.25 par, 20,000,000 shares authorized, 1,750,250 shares issued and outstanding……..

Paid-in capital in excess of par…………………………………………………………………………………….

Retained earnings………………………………………………………………………………………………….

$                  5,688,312.50

$                50,144,662.50

$                40,000,000.00

Total stockholders' equity

$                     95,832,975

a.) Assuming KCE Shuttle Corps board were to declare a 19.25% stock dividend, how would the revised stockholders' equity appear? Use the template below to revise KCE Shuttles Stockholders' Equity to account for the declaration given by the board.[Hint: Some information will not changed from KCE Shuttles original stockholders equity structure].

Note: Your results should be based on your use of KCE Shuttles original capital structure provided above.

Common stock, _______ par, _______________ shares authorized, ____________ shares issued and outstanding Paid-in capital in

excess of par

Retained earnings

Total stockholders' equity

c.)       What entry should be made to account for KCE Shuttle Corporations' Board declared 19.25% stock dividend noted in "a.)" above?

Common stock, $3.25 par, 20,000,000 shares authorized, 1,750,250 shares issued and outstanding……..

Paid-in capital in excess of par…………………………………………………………………………………….

Retained earnings………………………………………………………………………………………………….

$                  5,688,312.50

$                50,144,662.50

$                40,000,000.00

Total stockholders' equity

$                     95,832,975

Explanation / Answer

In the books of KCE Shuttle Corp Particulars Amount($) Paid Up Par 5688312.5 Paid in Capital in excess of Par 50144662.5 Retained Earnings 40000000 95832975 StocK dividend @ 19.25% = 5688312.50*19.25% = 1095000 Particulars Amount($) Authorised 20000000 shares of $ 3.25 each Paid Up Par (1750250 Nos) 5688312.5 Paid in Capital in excess of Par 50144662.5 Retained Earnings ( net of Dividend provision) 38905000 94737975 Entry for dividend declared Proposed Dividend Account Dr        10950000                  To   Dividend payable Account                  1095000

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