Question

Practice Brief Exercise 02 Swifty Corporation has 44,000 shares of $10 par value common stock outstanding. It declares a 10% stock dividend on December 1 when the market price per share is $19. The dividend shares are issued on December 31. Prepare the entries for the declaration and issuance of the stock dividend.

Answer 1

Answer:

Dec-31

Dr Stock Dividend $83,600

Cr Stock Dividend Distributable $44,000

Cr Paid - in - capital in excess of Par (44,000 * m

Dec-31

Dr  Stock Dividend Distributable $44,000

Cr Common stock  $44,000

Explanation:

Preparation of  the entries for the declaration and issuance of the stock dividend

Dec-31

Stock Dividend $83,600

(44,000*  10% * $19)  

Cr Stock Dividend Distributable $44,000

($44,000 *10% *$10)  

Cr Paid - in - capital in excess of Par (44,000 * 10% *$9)  $39,600

($19+$10=$9)

(Being to record Stock dividend declared)  

Dec-31

Dr  Stock Dividend Distributable $44,000

Cr Common stock  $44,000

(Being to record issuance of the stock dividend)