Question:
APPLY THE CONCEPTS: Journalize a stock dividend
When a stock dividend of 20%Ac€?o25% or less is declared, it is considered a small stock dividend. It is recorded at the market value of the stock on the date of declaration. Assume that a company announced on September 1, 2011, that it would issue a 10% stock dividend on September 30. On September 1, a single share of the company's stock was selling on the market for $32. Use this information and the partial balance sheet given here to complete the steps needed to journalize the stock dividend.
|
Partial Balance Sheet
|
|
September 1, 2011
|
|
Stockholders' Equity:
|
|
|
Common stock, $10 par value, 15,000 shares authorized and 6,000 shares issued and outstanding
|
$60,000
|
|
Additional Paid-in CapitalAc€??Common
|
132,000
|
|
Retained Earnings
|
258,000
|
|
Total Stockholders' Equity
|
$450,000
|
|
|
|