uestion 9 (1 point) On December 1, 2017, Arthur, Inc. had 43,000 shares of $9 pa
ID: 2519498 • Letter: U
Question
uestion 9 (1 point) On December 1, 2017, Arthur, Inc. had 43,000 shares of $9 par value common stock issued and outstanding. The next day it declared a 50% stock dividend. The market value of the stock on that date was $12 per share. Which of the following is the correct journal entry to record this transaction? A) debit Common Stock $193,500 and credit Cash $193,500 B) debit Stock Dividends $193,500 and credit Common Stock Dividend Distributable $193,500 C) debit Stock Dividends $516,000 and credit Cash $516,000 D) debit Stock Dividends $516.000, credit Common Stock $387,000, and credit Paid-In Capital in Excess of Par $129,000
Explanation / Answer
Answer
B ) debit stock dividend 193500 and credit common stock dividend distributable 193500
no of stock issued and out standing = 43000 shares
value of common stock = 9
stock dividend declared = 50 %
no of stock decleared as dividend = 43000 * 50 %
= 21500 shares
value of stock dividend declared = 21500 * 9
= 193500
stock dividend Dr 193500
To common stock dividend distributable 193500
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