Sheffield Corp. has 59,000 shares of $13 par value common stock outstanding. It

Question

Sheffield Corp. has 59,000 shares of $13 par value common stock outstanding. It declares a 12% stock dividend on December 1 when the market price per share is $16. The dividend shares are issued on December 31. Prepare the entries for the decaration and issuance of the stock dividend. (Record journal entries in the order presented in the problem. 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 O for the amounts.) Date Account Titles and Explanation Debit

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit dec 1 Retained earnings a/c (59000*12%*16) 113280      Common stock dividend distributable a/c (7080*13) 92040       Paid in capital in excess of par value (7080*3) 21240 Dec 31 Common stock dividend distributable a/c 92040        Common stock a/c 92040

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