On April 1, 2016, the board of directors of Core Technologies declared a 10% sto
ID: 2562956 • Letter: O
Question
On April 1, 2016, the board of directors of Core Technologies declared a 10% stock dividend on common shares, to be distributed on June 1. The market price of Core Technologies’ common stock was $40 on April 1, 2016, and $50 on June 1, 2016
1.)Complete the below table to calculate the stock dividend.
2.) Journal entry. Record the declaration of the stock dividend
3.) Journal entry Record the distribution of the stock dividend
The shareholders’ equity of Core Technologies Company on June 30, 2015, included the following:Explanation / Answer
Table;
No of shares outstanding = 4,000,000
Stock dividend % =10
No of shares to be issued = 4,000 000*10% =400,000
Value of stock dividend (400,000*$40) = $16,000,000
JORNAL ENTRIES;
Apr 1St
Retained earnings (400,000*$40) Dr. 16,000,000
To common stock dividend distributable (400,000*1) 400,000
To paid up capital in excess of par 15,600,000
On June 1St distribution
Common stock distributable Dr. 400,000
To common stock Cr. 400,000
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