Part 1 Part 2. Gets cut off but reads, Compute the book value per share and tota
ID: 2600922 • Letter: P
Question
Part 1 Part 2. Gets cut off but reads, Compute the book value per share and total book value of this stockholder’s shares immediately before and after the stock dividend of Feb 5. Exercise 11-6 Stock dividends and per share book values LO P2 [The following information applies to the questons dsplayed below The stockholders equity of TVX Company at the beginning of the day on February 5 follows Common stock-$10 par value, 150,000 shares authorized, 60,000 shares issued and outstanding Paid-in capital in excess of par value, common stock Retained earnings Total stockholders' equity s 600,000 425,000 550,000 s 1,575,000 On February 5, the directors declare a 20% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock's market value is $40 per share on February 5 before the stock dividend. The stock's market value is $33 40 per share on February 28.Explanation / Answer
Working Note:1) CALCULATION OF THE STOCK DIVIDEND PAID Stock Dividend Declared = ($ 60, 000 X 20% ) =12,00 Shares @ $ 10 Per shares = $ 1,20,000 Paid in Capital Excess of Par =(1200 Shares @ $ 30 Per Shares)= $ 3,60,000 Total Value of Stock Dividend = $ 4,80,000 Answer =1 Journal Entries Date Account Title and explanation Debit Credit Retained Earning $ 4,80,000 Feb, 05 To Common Stock dividend distributable $ 1,20,000 To Paid in Capital in Excess of Par Value , common Stock $ 3,60,000 (To Record the issuance of Bonus dividend) Common Stock dividend distributable $ 1,20,000 To Common Stock $ 1,20,000 (To Record the issuance of Common stock to stockholders) Answer =2 Befor After Working Note 2: Book Value per Shares (A) 40 33.40 Number of shares(B) 800 960 (800 X 120%) Total Book Value (AXB) $ 32,000 $ 32,064