Richman Corporation has 120,000 shares of $5 par value common stock outstanding. It declared a 15% stock dividend on June 1 when the market price per share was $12. The shares were issued on June 30. Instructions1- Prepare the necessary entries for the declaration, record and payment of the stock dividend. 2- List the three dates that are related to dividends and discuss them briefly. Solution - declaration entry AccountsDebitCredit Solution - 2- List the three dates that are related to dividends and discuss them briefly. Stock dividend (120000*15%*12)216000 1- Common Stock dividend distributable 90000 2- Paid in capital in excess of par-Common Stock 126000 3- Solution - record entry AccountsDebitCredit Solution - payment entry AccountsDebitCredit

Stock Dividend - Stock Dividend is the dividend issued by the company in the form of shares. This is…

Answered: Richman Corporation has 120,000 shares…

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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Richman Corporation has 120,000 shares of $5 par value common stock outstanding. It declared a 15% stock dividend on June 1 when the market price per share was $12. The shares were issued on June 30.
Instructions 1- Prepare the necessary entries for the declaration, record and payment of the stock dividend.
2- List the three dates that are related to dividends and discuss them briefly.
Solution - declaration entry
Accounts	Debit	Credit	Solution - 2- List the three dates that are related to dividends and discuss them briefly.
Stock dividend (12000015%12)	216000		1-
Common Stock dividend distributable		90000	2-
Paid in capital in excess of par-Common Stock				126000	3-

Solution - record entry
Accounts	Debit	Credit




Solution - payment entry
Accounts	Debit	Credit