corporation had stockholders\' equity on January 1 as follows: Common Stock, S1
ID: 2590823 • Letter: C
Question
corporation had stockholders' equity on January 1 as follows: Common Stock, S1 par value, 1,500,000 ock, shares authorized, 600,000 shares issued: Paid-in Capital in Excess of Par Value, Common St 1.100,000: Retained Earnings, $2,300,000. Prepare journal entries to record the following transactions: The board of directors declared a 10% stock dividend to stockholders of record Feb. 15 on March 1, to be issued on April 15. The stock was trading at $12 per share prior o the dividend Sold 100,000 shares of common stock for $13 per share. Issued the stock dividend. Mar. 31 Apr. 15Explanation / Answer
No. of shares to be issued: 600,000 *10%= 60000 shares
Amount to be debited to Retained Earnings= 60000*12=$720000
February 15 Retained Earnings $720,000
Stock Dividends Distributable $60,000
Paid-in Capital in excess of Par $660,000
March 1 No entry required
Mar 31 Cash $13,00,000
Common stock ($1 par value) $1,00,000
Additional paid in capital (common stock) $12,00,000
April 15 Stock dividends Distributable $60,000
Common Stock $60,000
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