The shareholders\' equity of Core Technologies Company on June 30, 2015, include

Question

The shareholders' equity of Core Technologies Company on June 30, 2015, included the following: Common stock, $1 par; authorized, 7 million shares; issued and outstanding, 3 million shares Paid-in capital-excess of par Retained earnings $3,000,000 12,000,000 10,000,000 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 $24 on April 1, 2016, and $34 on June 1, 2016. Required: Complete the below table to calculate the stock dividend. Stock Dividend Number of outstanding shares Stock dividend percentage Number of shares to be issued Value of stock dividend

Explanation / Answer

Number of outstanding shares 3000000 Stock dividend percentage 10% Number of shares to be issued 300000 x Market Value April 1 24 Value of stock dividend 7200000 Apr-01 Retained earnings 7200000          Common stock dividends distributable 300000           Paid-in capital— Excess of par 6900000 Jun-01 Common stock dividends distributable 300000          Common stock 300000

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