4 Required information The following information applies to the questions displa

Question

4 Required information The following information applies to the questions displayed below) The stockholders' equity of TVX Company at the beginning of the day on February 5 follows: Part 1 of 2 7 points Common stock-$10 par value, 150,000 shares authorized, 57,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders equity $ 570,000 525,000 675,000 $1,770,000 eBook On February 5, the directors declare a 10% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock's market value is $39 per share on February 5 before the stock dividend. The stock's market value is $35 per share on February 28 Print References 1. Prepare entries to record both the dividend declaration and its distribution. View transaction list Journal entry worksheet Record the declaration of 10% stock dividend Note: Enter debits before credits Date General Journal Debit Credit Feb 05

Explanation / Answer

Feb 5 Dividend A/C Dr................57,000

To Dividend payable .......................57,000

on Payment

Dividend Payable A/C Dr...............57,0000

To Bank ....................................................57,0000

2. Book value before dividend is equal to Total of Equity / Nuber of shares i.e. 31.05

Total Book value of 1000 shares is 31502

After dividend since RS 1 is distributed to shareholders as dividend book value will reduce by same i.e 30.05

Total book value will be 30,050

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