Question

for each of the following independent transactions a through d, prepare the necessary journal entry:

(a) Declared a $0.30 per share cash dividend on 400,000 shares of common stock outstanding.

(b) Declared and distributed a 12% stock dividend on 600,000 outstanding shares of $10 par value common stock outstanding. Market price per common share on this date was $28.

(c) Declared and distributed a 5-for-1 stock split on 900,000 shares of $10 par value common stock outstanding.

(d) Declared and distributed a 28% stock dividend (this would be a large stock dividend) on 700,000 common shares outstanding of $10 par value common stock outstanding. Market price per common share on this date was $25.

Answer 1

Date	Accounts Name	Debit	Credit
a	Reatained Earnings ( 400000 * 0.30 )	120000
	Dividend Payable		120000
b	Small Stock Dividend ( market Value )
	Retained Earnings ( 600000*12%*28)	2016000
	Common Stock ( 600000 * 12% * 10)		720000
	Additional Paid in capital - Common Stock		1296000
c	no entry required just memo entry required
	(900000 Shares with par value $ 10 , Splitted to
	4500000 Share of $ 2 par Value )
d	Large Stock Dividend ( only par Value )
	Retained Earnings ( 700000 * 28%* 10)	1960000
	Common Stock		1960000