The shareholders’ equity of Raven Company is as shown: RAVEN COMPANY Partial Balance Sheet 1 Common stock, $10 par $250,000.00 2 Additional paid-in capital on common stock 150,000.00 3 Retained earnings 200,000.00 4 $600,000.00 Raven is considering the declaration and issuance of a stock dividend at a time when the market price is $30 per share. Required: 1. Assuming the board of directors recommends a 6% stock dividend, prepare: a. the journal entry at the date of declaration b. the journal entry at the date of issuance c. shareholders’ equity after the issuance 2. Assuming, instead, that a 40% stock dividend is recommended, answer a, b, and c of Requirement 1
The shareholders’ equity of Raven Company is as shown: RAVEN COMPANY Partial Balance Sheet 1 Common stock, $10 par $250,000.00 2 Additional paid-in capital on common stock 150,000.00 3 Retained earnings 200,000.00 4 $600,000.00 Raven is considering the declaration and issuance of a stock dividend at a time when the market price is $30 per share. Required: 1. Assuming the board of directors recommends a 6% stock dividend, prepare: a. the journal entry at the date of declaration b. the journal entry at the date of issuance c. shareholders’ equity after the issuance 2. Assuming, instead, that a 40% stock dividend is recommended, answer a, b, and c of Requirement 1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
100%
The shareholders’ equity of Raven Company is as shown:
|
RAVEN COMPANY
|
|
Partial
|
|
1
|
Common stock, $10 par
|
$250,000.00
|
|
2
|
Additional paid-in capital on common stock
|
150,000.00
|
|
3
|
|
200,000.00
|
|
4
|
|
$600,000.00
|
Raven is considering the declaration and issuance of a stock dividend at a time when the market price is $30 per share.
Required:
| 1. | Assuming the board of directors recommends a 6% stock dividend, prepare: |
| a. | the |
| b. | the journal entry at the date of issuance |
| c. | shareholders’ equity after the issuance |
| 2. |
Assuming, instead, that a 40% stock dividend is recommended, answer a, b, and c of Requirement 1.
|
Expert Solution
Introduction
Stock dividend is kind of reward or return which is given by business entities to their shareholder as per the investments made by the investor. Receiving stock or share dividend increases the total number of existing shares hold by an investor.
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