Question

The following account balances appear on the balance sheet of Osgood Industries:

Common Stock (300,000 shares authorized, $100 par)	$10,000,000
Paid-In Capital in Excess of Par—Common Stock	2,000,000
Retained Earnings	45,000,000

The board of directors declared a 2% stock dividend when the market price of the stock was $135 per share.

	Required:
(1)	Journalize the entries to record:*
(a)	Declaration of the dividend, capitalizing an amount equal to market value
(b)	Issuance of the stock certificates
(2)	Determine the following amounts before the stock dividend was declared:
(a)	Total paid-in capital
(b)	Total retained earnings
(c)	Total stockholders’ equity
(3)	Determine the following amounts after the stock dividend was declared and closing entries were recorded at the end of the year:
(a)	Total paid-in capital
(b)	Total retained earnings
(c)	Total stockholders’ equity
	*Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS Osgood Industries General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Supplies 151 Prepaid Insurance 181 Land 191 Buildings 192 Accumulated Depreciation-Building 193 Equipment 194 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 311 Preferred Stock 312 Paid-In Capital in Excess of Par-Preferred Stock 321 Common Stock 322 Paid-In Capital in Excess of Par-Common Stock 323 Paid-In Capital in Excess of Stated Value-Common Stock 331 Treasury Stock 332 Paid-In Capital from Sale of Treasury Stock 336 Stock Dividends Distributable 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends Determine the following amounts before the stock dividend was declared: Total paid-in capital $ Total retained earnings $ Total stockholders’ equity $ Determine the following amounts after the stock dividend was declared and closing entries were recorded at the end of the year: Total paid-in capital $ Total retained earnings $ Total stockholders’ equity $ Journalize the entries to record the declaration of the dividend, capitalizing an amount equal to market value on December 31. Refer to the Chart of Accounts for exact wording of account titles. PAGE 1 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 2 3 Journalize the entries to record the issuance of the stock certificates on December 31. Refer to the Chart of Accounts for exact wording of account titles. PAGE 1 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 2 REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Rent Expense 534 Insurance Expense 535 Supplies Expense 536 Organizational Expenses 561 Depreciation Expense-Building 562 Depreciation Expense-Equipment 590 Miscellaneous Expense 710 Interest Expense

Answer 1

Date	Accounts Title	Post ref	Dr	Cr
a	Stock Dividend	352	$270,000
	Stock Dividend Distributable	336		$270,000
(being stock dividend declred)
	No. of stodk=100000*2%=2000
	Stock dividend=2000*135		270000
b	Stock Dividend Distributable	336	$270,000
	Common stock (2000*100)	321		200000
	Paid-In Capital in Excess of Par—Common Stock	322		$70,000
(being stock dividend distributed)
	Before stock dividend declared
2)	Total paid-in capital (10000000+2000000)		12000000
	Total retained earnings		45000000
	Total stockholders’ equity		57000000
Closing entry
	Retained Earnings	340	$270,000
	Stock dividend	352		$270,000
	After stock dividend
	Total paid-in capital (10000000+2000000+270000)	12270000
	Total retained earnings (45000000-270000)	44730000
	Total stockholders’ equity	57000000
If any doubt please comment