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If the Stock Dividends < 25%, recorded at fair market value. If the Stock Dividends > 25%, recorded at book value. Example1: Velvet Company has 5,000 shares issued and outstanding. Par value is $1; book value $32 and market value is $40. Instruction: prepare the entries at the different following situations 1- 10% stock dividend is declared (market value $40)

If the Stock Dividends < 25%, recorded at fair market value. If the Stock Dividends > 25%, recorded at book value. Example1: Velvet Company has 5,000 shares issued and outstanding. Par value is $1; book value $32 and market value is $40. Instruction: prepare the entries at the different following situations 1- 10% stock dividend is declared (market value $40)

FINANCIAL ACCOUNTING
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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If the Stock Dividends < 25%, recorded at fair market value. If the Stock Dividends > 25%, recorded at book value. Example1: Velvet Company has 5,000 shares issued and outstanding. Par value is $1; book value $32 and market value is $40. Instruction: prepare the entries at the different following situations 1- 10% stock dividend is declared (market value $40) 2- 50% stock dividend is declared (book value $32) 7:09 PM
Transcribed Image Text:If the Stock Dividends < 25%, recorded at fair market value. If the Stock Dividends > 25%, recorded at book value. Example1: Velvet Company has 5,000 shares issued and outstanding. Par value is $1; book value $32 and market value is $40. Instruction: prepare the entries at the different following situations 1- 10% stock dividend is declared (market value $40) 2- 50% stock dividend is declared (book value $32) 7:09 PM
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