QUESTION 3 Partially correct 2.54 points out of 3.00 F Flag question Stock Divid

Question

QUESTION 3 Partially correct 2.54 points out of 3.00 F Flag question Stock Dividends Witt Corporation has 70,000 shares of $5 par value common stock outstanding. Atyear-end, the company declares a five percent stock dividend. The market price of the stock on the declaration date is S21 per share. Four weeks later, the company issues the shares of stock to stockholders. a. Prepare the journal entry for the declaration of the stock dividend. b. Prepare the journal entry for the issuance of the stock dividend. C. Assume that the company declared a 30 percent stock dividend rather than a five percent stock dividend. Prepare the journal entries for (1) the declaration of the stock dividend and (2) the issuance of the stock dividend. General Journal Ref Description Debit Credit a. Stock Dividends 73,500 Stock Dividend Distributable 17.500 Paid-in-Capital in Excess of Par Value 56.000 To record declaration of stock dividend. bStock Dividend Distributable 17,500 Common Stock 17.500 Issued common stock for stock dividend. 1) Stock Dividends 17.500 X Stock Dividend Distributable 17.500 X To record decaration of stock dividend. c. 2) Stock Dividend Distributable 17,500 X Common Stock 17500 X Issued common stock for stock dividend

Explanation / Answer

Par Value of Stock = 70000 shares * $ 5 = $ 350,000

Dividend = 30% of par value of Share

= 30% of $ 350,000

= $ 105000

In C 1) and C 2) we need to fill $ 105,000 to get correct answer

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