CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTION 3 Not complete Points out of 3

Question

CLICK HERE TO REVIEW LEARNING OBJECTIVES QUESTION 3 Not complete Points out of 3.00 Stock Dividends P Flag question Witt Corporation has 70,000 shares of $5 par value common stock outstanding. At year-end, the company declares a five percent stock dividend. The market price of the stock on the declaration date is $21 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. Paid-in-Capital in Excess of Par Value To record declaration of stock dividend

Explanation / Answer

Ref. Description Debit Credit a) Stock dividend (3500*21) 73500 Stock dividend distributable 17500 paid in capital in excess of par value 56000 (70,000*5%=3,500 shares) b) Stock dividend distributable 17,500 common stock 17,500 C.1) Stock divident 105000 Stock dividend distributable 105,000 (70,000*30%*5) C2) Stock dividend distributable 105,000 Common stock 105,000

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