Recording Stock Dividends and Stock Splits The records of Dixie Corporation showed the following balances on November 1, 2020. Common stock, $10 par, 18,000 shares outstanding $180,000 Paid-in capital in excess of par 61,200 Retained earnings 120,000 The fair value of its stock is $18 per share. Accounting for Stock Dividends Accounting for Stock Splits Prepare journal entries for the following three separate scenarios. a. The company declares (November 1, 2020) and issues (November 20, 2020) a 10% stock dividend. b. The company declares (November 1, 2020) and issues (November 20, 2020 ) a 10 % stock dividend. Of the 1,800 stock dividend shares, 1,680 shares are whole shares and 120 shares are fractional shares. It is the company's policy to pay out fractional shares in cash. c. The company declares (November 1, 2020) and issues (November 20, 2020) a stock split effected in the form of a 100% stock dividend. • Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. • Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Nov. 1, 2020 Account Name Dr. Cr.
Recording Stock Dividends and Stock Splits The records of Dixie Corporation showed the following balances on November 1, 2020. Common stock, $10 par, 18,000 shares outstanding $180,000 Paid-in capital in excess of par 61,200 Retained earnings 120,000 The fair value of its stock is $18 per share. Accounting for Stock Dividends Accounting for Stock Splits Prepare journal entries for the following three separate scenarios. a. The company declares (November 1, 2020) and issues (November 20, 2020) a 10% stock dividend. b. The company declares (November 1, 2020) and issues (November 20, 2020 ) a 10 % stock dividend. Of the 1,800 stock dividend shares, 1,680 shares are whole shares and 120 shares are fractional shares. It is the company's policy to pay out fractional shares in cash. c. The company declares (November 1, 2020) and issues (November 20, 2020) a stock split effected in the form of a 100% stock dividend. • Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. • Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). Nov. 1, 2020 Account Name Dr. Cr.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Recording Stock Dividends and Stock Splits
The records of Dixie Corporation showed the following balances on November 1, 2020.
Common stock, $10 par, 18,000 shares outstanding $180,000
Paid-in capital in excess of par
61,200
Retained earnings
120,000
The fair value of its stock is $18 per share.
Accounting for Stock Dividends Accounting for Stock Splits
Prepare journal entries for the following three separate scenarios.
a. The company declares (November 1, 2020) and issues (November 20, 2020) a 10% stock dividend.
b. The company declares (November 1, 2020) and issues (November 20, 2020) a 10% stock dividend. Of the 1,800
stock dividend shares, 1,680 shares are whole shares and 120 shares are fractional shares. It is the company's
policy to pay out fractional shares in cash.
c. The company declares (November 1, 2020) and issues (November 20, 2020) a stock split effected in the form
of a 100% stock dividend.
• Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in
alphabetical order.
• Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr.
and Cr. answers blank (zero).
a. Nov. 1, 2020
Nov. 20, 2020
Account Name
To record declaration of dividend.
To record issuance of dividend.
000
00
Dr.
Cr.
Transcribed Image Text:of a 100% stock dividend.
• Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in
alphabetical order.
• Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr.
and Cr. answers blank (zero).
a. Nov. 1, 2020
Nov. 20, 2020
b. Nov. 1, 2020
Nov. 20, 2020
Nov. 20, 2020
c. Nov. 1, 2020
Nov. 20, 2020
Account Name
To record declaration of dividend.
To record issuance of dividend.
To record declaration of dividend.
To record issuance of stock dividend.
To record issuance of cash dividend.
To record declaration of dividend.
To record issuance of stock dividend.
000
♦
00
0000
+
●
00
00
00
00
Dr.
Cr.
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