Enterprises Inc. include the following on January 1, 2016:
Common stock, $20 stated value; 500,000 shares authorized, 369,000 issued: $7,380,000
Paid-In capital in Excess of Stated Value-Common Stock: $848,700
Retained Earnings: $33,497,000
Treasury Stock (23, 300 shares, at cost): $419,400
Create a T-chart for the following transaction using only the accounts already in use on January 1:
Jul, 5 Declared a 2% stock dividend on common stock, to be capitalized at the market price of the stock, which is $26 per share.
A stock dividend is a type of dividend distribution made to shareholders. However, instead of a traditional distribution of cash, a stock dividend entails the issuance of additional shares of stock to existing shareholders.
Answer and Explanation: 1
The journal entry for the declaration transaction is to be recorded as follows:
Debit: Retained Earnings for $191,880
Credit: Stock Dividend Payable...
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fromChapter 16 / Lesson 1
Dividends are incentives in the form of payments to shareholders of a company. Explore the different types of dividends and the standard method of payments that they occur in.