The stockholders’ equity of TVX Company at the beginning of the day on February

Question

The stockholders’ equity of TVX Company at the beginning of the day on February 5 follows:

On February 5, the directors declare a 12% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $34 per share on February 5 before the stock dividend. The stock’s market value is $30 per share on February 28.

Common stock—$15 par value, 150,000 shares
authorized, 69,000 shares issued and outstanding $ 1,035,000 Paid-in capital in excess of par value, common stock 525,000 Retained earnings 675,000 Total stockholders’ equity $ 2,235,000 Journai entry worksneet 2 Record the declaration of 12% stock dividend. Note: Enter debits before credits. Date General Journal Debit Credit Feb 05 Retained earnings Common stock dividend distributable 124,200 Paid-in capital in excess of par value, Common stock Record entry Clear entry View general journal

Explanation / Answer

Date General Journal Debit Credit Feb. 5 Retained earnings 281,520 To Common stock dividend distributable 124,200 To paid-in capital in excess of par value,Common stock 157320 * Retained earnings( 69000 * 12% *34 ) =281,520 *Common stock dividend distributable (1035000 * 12% ) = 124,200 * Paid in capital in excess of par value, common stock (69000 * 12% *19) = 157320 *Excess of par value (34 - 15) = 19

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