M11-16 (Supplement 11B) Recording a Stock Dividend [LO 11-S2] To reduce its stoc

Question

M11-16 (Supplement 11B) Recording a Stock Dividend [LO 11-S2] To reduce its stock price, Shriver Food Systems, Inc. declared and issued a 75 percent stock dividend. The company has 770,000 shares authorized and 170,000 shares outstanding. The par value of the stock is $1 per share and the market value is $100 per share. Prepare the journal entry to record this large stock dividend. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the declaration of a 75 percent stock dividend on the 170,000 shares of stock outstanding with a par value of $1 per share. Note: Enter debits before credits. Transaction General Journal Debit Credit This is a numeric cell, so please enter numbers only. Record entry Clear entry View general journal

Explanation / Answer

Transaction General Journal Debit Credit 1 Retained earnings(170,000 shares × 75% × $1 par value) $127,500 Common stock $127,500

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