Exercise 18-19 Stock dividend [L018-8 The shareholders\' equity of Core Technolo

Question

Exercise 18-19 Stock dividend [L018-8 The shareholders' equity of Core Technologies Company on June 30, 2015, included the following: Common stock, $1 par, authorized, 7 million shares; ssued and outstanding, 3 million shares Paid-in capital excess of par Retained eamings $ 3,000,000 12,000,000 16,000,000 On April 1, 2016, the board of directors of Core Technologies declared a 10% stock dividend on cornmon shares, to be distributed on June 1. The market price of Core Technologies' common stock was $3 on Apri 1, 2016, and $46 on June 1, 2016. Complete the below table to calculate the stock dividend. Number of outstanding shares Stock dividend percentage Number of shares to be issued Value of stock dividend esc FI F3 FS 8 0 4

Explanation / Answer

Stock Dividend Number ofoutstanding shares 3,000,000 Stock dividend percentage 10 % Number of shares to be issued 300,000 x Market Value April 1 36 Value of stock dividend 10,800,000 Date General Journal Debit Credit April 01, 2016 Retained earnings 10,800,000 Common stock dividends distributable (300,000 x $1) 300000 Paid-in capital—Excess of par 10500000 June 01, 2016 Stock dividend distributable 300000 Common stock 300000

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