Journalizing a stock dividend and reporting stockholders’ equityThe stockholders’ equity of Lakeside Occupational Therapy, Inc. on December 31, 2017, follows:On April 30, 2018, the market price of Lakeside’s common stock was $16 per share and the company declared a 13% stock dividend. The stock was distributed on May 15.RequirementsJournalize the declaration and distribution of the stock dividend.Prepare the stockholders’ equity section of the balance sheet as of May 31, 2018. Assume Retained Earnings are $120,000 on April 30,2018, before the stock dividend, and the only change made to Retained Earnings before preparing the balance sheet was closing the Stock Dividends account. Stockholders' EquityPaid-In Capital:Common Stock-$1 Par Value; 1,200 sharesauthorized, 400 shares issued and outstanding400Paid-In Capital in Excess of Par-Common1,600Total Paid-In Capital2,000Retained Earnings120,000Total Stockholders' Equity$ 122,000

1. 400 shares * $16 * 13% is 832

Answered: Stockholders' Equity Paid-In Capital:…

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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Journalizing a stock dividend and reporting stockholders’ equity

The stockholders’ equity of Lakeside Occupational Therapy, Inc. on December 31, 2017, follows:

On April 30, 2018, the market price of Lakeside’s common stock was $16 per share and the company declared a 13% stock dividend. The stock was distributed on May 15.

Requirements

Journalize the declaration and distribution of the stock dividend.
Prepare the stockholders’ equity section of the balance sheet as of May 31, 2018. Assume Retained Earnings are $120,000 on April 30,2018, before the stock dividend, and the only change made to Retained Earnings before preparing the balance sheet was closing the Stock Dividends account.

Stockholders' Equity
Paid-In Capital:
Common Stock-$1 Par Value; 1,200 shares
authorized, 400 shares issued and outstanding
400
Paid-In Capital in Excess of Par-Common
1,600
Total Paid-In Capital
2,000
Retained Earnings
120,000
Total Stockholders' Equity
$ 122,000

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