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Wilma Corporation reported the following in its shareholders’ equity section on the January 1, 2019 Balance...

Wilma Corporation reported the following in its shareholders’ equity section on the January 1, 2019 Balance Sheet: Common shares, 100,000 authorized, 25,000 outstanding $100,000 On October 1, 2019, the company declared a 10% common stock dividend on the outstanding common shares when they were trading at $32 per share Record the journal entry for the stock dividends declared . Show calculations.

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Working Notes: 1
Calculation of stock Dividend value
Total Share outstanding = $2,43,600
Monthly Revenue = $ 243,600 / 12 Month=                              25,000 Shares
10% of Common stock dividend is declared = 25,000 X 10% =                                2,500 Shares
Value of Stock Dividend = 2,500 Shares X $ 32 = $80,000.00
Solution : 1
Journal Entries
Date ACCT Title and explanation Debit Credit
October 01, 2019 Retained Earnings $80,000
         Common Stock dividend distributable $80,000
(Record the stock Dividend declaration)

ekkarill92 answered 1 year ago
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