Stock DividendsMammoth Corporation has 100,000 shares of $10 par value common stock outstanding. At year-end, the company declares a five percent stock dividend. The market price of the stock on the declaration date is $30 per share. Three weeks later, the company issues the shares of stock to stockholders. a. Prepare the journal entry for the declaration of the stock dividend.b. Prepare the journal entry for the issuance of the stock dividend.c. Assume that the company declared a 50 percent stock dividend rather than a five percent stock dividend. Prepare the journal entries for (1) the declaration of the stock dividend and (2) the issuance of the stock dividend. General Journal Ref. Description Debit Credit a. Answer Answer Answer Answer Answer Answer Paid-in capital in excess of par value Answer Answer To record declaration of stock dividend. b. Answer Answer Answer Answer Answer Answer Issued common stock for stock dividend. c. (1) Answer Answer Answer Answer Answer Answer To record declaration of stock dividend. c. (2) Answer Answer Answer Answer Answer Answer Issued common stock for stock dividend.

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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Stock Dividends
Mammoth Corporation has 100,000 shares of $10 par value common stock outstanding. At year-end, the company declares a five percent stock dividend. The market price of the stock on the declaration date is $30 per share. Three weeks later, the company issues the shares of stock to stockholders.

a. Prepare the journal entry for the declaration of the stock dividend.
b. Prepare the journal entry for the issuance of the stock dividend.
c. Assume that the company declared a 50 percent stock dividend rather than a five percent stock dividend. Prepare the journal entries for (1) the declaration of the stock dividend and (2) the issuance of the stock dividend.

General Journal
Ref.	Description	Debit	Credit
a.	Answer	Answer	Answer
	Answer	Answer	Answer
	Paid-in capital in excess of par value	Answer	Answer
	To record declaration of stock dividend.
b.	Answer	Answer	Answer
	Answer	Answer	Answer
	Issued common stock for stock dividend.
c. (1)	Answer	Answer	Answer
	Answer	Answer	Answer
	To record declaration of stock dividend.
c. (2)	Answer	Answer	Answer
	Answer	Answer	Answer
	Issued common stock for stock dividend.