I don't know why I got this wrong ### Stock Dividend Accounting Entry**Problem 12:**Luke Enterprises has 300,000 shares of $20 par common stock outstanding. On January 19, Luke Enterprises declared a 3% stock dividend. The market price of the stock on January 19 was $28 per share. The journal entry to record the stock dividend would include:- **a.** a credit to Stock Dividends for $180,000.- **b.** a debit to Stock Dividends Distributable for $252,000.- **c.** a debit to Cash for $252,000.- **d.** None of these choices are correct.**Solution Explanation:**To calculate the value of the stock dividend declared, we use the formula:\[ \text{Number of shares} \times \text{Market Price} \times \text{Dividend Percentage} \]Applying the given values:\[ 300,000 \text{ shares} \times 0.03 \times 28 = 252,000 \]Thus, the correct entry would be:**b.** a debit to Stock Dividends Distributable for $252,000.This indicates that the correct journal entry for the stock dividend would be a debit to Stock Dividends Distributable for $252,000.**Note:**There is a miscalculation highlighted in the image as $300,000 \times 28 \times 0.03 = 252,000$, but it might also be mistakenly written as $ 300,000 \times 28.03 = 252,000 $.In conclusion, the journal entry should properly reflect the debit to Stock Dividends Distributable for $252,000.

Dividend is issued to the shareholders mainly in two forms - cash and shares.

12. Luke Enterprises has 300,000 shares of $20 par common stock outstanding. On January 19, Luke Enterprises declared a 3% stock dividend. The market price of the stock on January 19 was $28 per share. The journal entry to record the stock dividend would include a.a credit to Stock Dividends for $180,000. b.a debit to Stock Dividends Distributable for $252,000. C.a debit to Cash for $252,000. d.None of these choices are correct. wwwwm

12. Luke Enterprises has 300,000 shares of $20 par common stock outstanding. On January 19, Luke Enterprises declared a 3% stock dividend. The market price of the stock on January 19 was $28 per share. The journal entry to record the stock dividend would include a.a credit to Stock Dividends for $180,000. b.a debit to Stock Dividends Distributable for $252,000. C.a debit to Cash for $252,000. d.None of these choices are correct. wwwwm

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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