Austin Motor Works declared and distributed a 5% stock dividend in 2022 when the stock was selling for $18 per share. There were 6,000,000 shares outstanding at the time of the dividend declaration. The controller recorded the distribution at par value ($1 per share) resulting in a debit to Dividends and a credit to Common Stock for $300,000. Upon review in early 2023 when the 2022 books were still open, the CFO made which of the following correcting entries? (Abbreviations used: APIC = Additional Paid-In Capital) Group of answer choices Dividends 5,100,000 Common Stock 5,100,000 APIC in Excess of Par-Common 5,100,000 Common Stock5,100,000 Dividends 5,100,000 APIC in Excess of Par-Common 5,100,000 He made no entry because the controller was correct.
Austin Motor Works declared and distributed a 5% stock dividend in 2022 when the stock was selling for $18 per share. There were 6,000,000 shares outstanding at the time of the dividend declaration. The controller recorded the distribution at par value ($1 per share) resulting in a debit to Dividends and a credit to Common Stock for $300,000. Upon review in early 2023 when the 2022 books were still open, the CFO made which of the following correcting entries? (Abbreviations used: APIC = Additional Paid-In Capital) Group of answer choices Dividends 5,100,000 Common Stock 5,100,000 APIC in Excess of Par-Common 5,100,000 Common Stock5,100,000 Dividends 5,100,000 APIC in Excess of Par-Common 5,100,000 He made no entry because the controller was correct.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Austin Motor Works declared and distributed a 5% stock dividend in 2022 when the stock was selling for $18 per share. There were 6,000,000 shares outstanding at the time of the dividend declaration. The controller recorded the distribution at par value ($1 per share) resulting in a debit to Dividends and a credit to Common Stock for $300,000. Upon review in early 2023 when the 2022 books were still open, the CFO made which of the following correcting entries? (Abbreviations used: APIC = Additional Paid-In Capital)
Group of answer choices
Common Stock 5,100,000
Common Stock5,100,000
APIC in Excess of Par-Common 5,100,000
| Dividends | 5,100,000 | |
| APIC in Excess of Par-Common | 5,100,000 | |
| Dividends | 5,100,000 |
He made no entry because the controller was correct.
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