In: Accounting
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Answer :
Feb. 1: Cash Dividends =54,000 shares x $3=$162,000
April 1: No journal entries is made on the Stock split;
2-for-1 Stock split means 54,000 shares increased by 54,000 x 2=108,000 shares ; The par value of shares will be =$22/2=$11
July 1: Stock dividend=10% x 108,000 x $15=$162,000
Common Stock Dividends Distribute =10% x 108,000 x $11=$118,800
Paid-in Capital in Excess of Par—Common Stock=$162,000-$118,800=$43,200
Dec. 1: Cash Dividends =108,000 shares x $0.40 x 110%=$47,520 (110% is Stock dividend of 10%; 100%+10%=110%)