Sammy, Inc. had 360,000 shares of $2 par value common stock issued and outstandi

Question

Sammy, Inc. had 360,000 shares of $2 par value common stock issued and outstanding as of July 15, 2016. The company is authorized to issue 1,000,000 common shares. On July 15, 2016, Sammy declared a 50% stock dividend when the market value for Sammy's common stock was $5 per share. The stock was issued on Jul. 30. Requirements Journalize the declaration and distribution of the stock dividend. How many shares of common stock are outstanding after the dividend? Requirement 1. Journalize the declaration and distribution of the stock dividend. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Start by journalizing the declaration of the stock dividend.

Explanation / Answer

journal retained earnings 900000 To common stock 360000 To paid in capital in excess of par 540000

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