Company Z has 2.75 million shares of common stock authorized with a par value of
ID: 2598538 • Letter: C
Question
Company Z has 2.75 million shares of common stock authorized with a par value of $1 and a market price of $65. There are 1.375 million outstanding shares and 0.34375 million shares held in treasury stock.
Prepare the journal entry if the company declares and distributes a 10% stock dividend. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars and not in millions.)
Record the declaration and distribution of the 10% stock dividend.
Show the effect of the 10% stock dividend on assets, liabilities, and stockholders' equity. (Enter all amounts as positive values. Enter your answers in dollars and not in millions.)
Prepare the journal entry if the company declares and distributes a 100% stock dividend. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars and not in millions.)
Show the effect of the 100% stock dividend on assets, liabilities, and stockholders' equity. (Enter all amounts as positive values. Enter your answers in dollars and not in millions.)
Company Z has 2.75 million shares of common stock authorized with a par value of $1 and a market price of $65. There are 1.375 million outstanding shares and 0.34375 million shares held in treasury stock.
Explanation / Answer
a. Journal
b.
There will be no effect on accounting equation due to stock dividend.
c. Journal
d.
There will be no effect on accounting equation due to stock dividend.
No. Account Name Debit Credit 1. Retained earnings[(1375000-343750) x $65 x 10%] $6703125 Common stock
[1031250 x $1 x 10%] $103125 Additional paid in capital
[1031250 x $64 x 10%] 6600000
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