To reduce its stock price, Shriver Food Systems, Inc. declared and issued a 100

Question

To reduce its stock price, Shriver Food Systems, Inc. declared and issued a 100 percent stock dividend. The company has 860,000 shares authorized and 260,000 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.)

Record the declaration of a 100 percent stock dividend on the 260,000 shares of stock outstanding with a par value of $1 per share.

Explanation / Answer

journal entry for declaration of dividend calculation of dividend amount dividend amount 260000 * 1 * 100 % dividend amount $260,000 journal entry retained earnings   a / c      dr        260,000        to proposed dividend a / c        260,000 ( to record the dividend amount proposed )

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