Exercise 11-16 On January 1, 2017, Monty Corp, had $1,160,000 of common stock ou

Question

Exercise 11-16 On January 1, 2017, Monty Corp, had $1,160,000 of common stock outstanding that was issued at par and retained earnings of $811,000. The company issued 38,000 shares of common stock at par on July 1 and earned net income of $495,000 for the year. Journalize the declaration of a 17% stock dividend on December 10, 2017, for the following two independent assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (a) Par value is $10 and market price is $18. (b) Par value is $5 and market price is $8. No. Account Titles and Explanation Debit Credit

Explanation / Answer

Ans.a Date Particulars Debit Credit 10-Dec-17 Stock Dividends 471240 Common stock dividends distributable 261800 Paid-in capital in excess of par value 209440 *Calculations: Total shares = (1160000/10) + 38000 154000 Stock Dividends 154000*17% * 18 Common stock dividends distributable 154000*17% * 10 Paid-in capital in excess of par value 154000*17% * (18-10) Ans.b Date Particulars Debit Credit 10-Dec-17 Stock Dividends 367200 Common stock dividends distributable 229500 Paid-in capital in excess of par value 137700 *Calculations: Total shares = (1160000/5) + 38000 270000 Stock Dividends 270000*17%*8 Common stock dividends distributable 270000*17%*5 Paid-in capital in excess of par value 270000*17%*(8-5)

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