Accounting and Financial Reporting II On July 31, a corporation has the followin

Question

Accounting and Financial Reporting II

On July 31, a corporation has the following financial data:

Common stock issued & outstanding                     100,000 shares

Par value of common stock                                      $10 per share

Market price of common stock                                                $50 per share

On July 31, the corporation declares 10% stock dividend on common stock. The stock dividends are distributed on August 31.

Prepare any necessary journal entries on July 31.

Prepare any necessary journal entries on August 31.

Explanation / Answer

31-Jul Retained earnings 500000 =100000*10%*50        Common stock dividend distributable 100000 =100000*10%*10        Paid in capital in excess of par-Common Stock 400000 31-Aug Common stock dividend distributable 100000         Common Stock 100000

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