The stockholders’ equity of TVX Company at the beginning of the day on February 5 follows. Common stock—$25 par value, 150,000 sharesauthorized, 63,000 shares issued and outstanding$1,575,000 Paid-in capital in excess of par value, common stock 426,000 Retained earnings 546,000 Total stockholders’ equity$2,547,000 On February 5, the directors declare a 2% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $41 per share on February 5 before the stock dividend. 1. Prepare entries to record both the dividend declaration and its distribution.

We have to provide journal entries for dividend declaration and its distribution.

Answered: The stockholders’ equity of TVX Company…

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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The stockholders’ equity of TVX Company at the beginning of the day on February 5 follows.


Common stock—$25 par value, 150,000 shares authorized, 63,000 shares issued and outstanding	$	1,575,000
Paid-in capital in excess of par value, common stock		426,000
Retained earnings		546,000
Total stockholders’ equity	$	2,547,000

On February 5, the directors declare a 2% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $41 per share on February 5 before the stock dividend.

1. Prepare entries to record both the dividend declaration and its distribution.

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