Fundamentals of Financial Accounting
5th Edition
ISBN: 9780078025914
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 11, Problem 11.2CP
Recording Stock Dividends
Activision Blizzard, Inc., reported the following in the notes to its financial statements.
Stock Split—In July, the Board of Directors approved a two-for-one split of our outstanding common shares effected in the form of a stock dividend (“the split”). The split was paid September 5 to shareholders of record as of August 25. The par value of our common stock was maintained at the pre-split amount of $.000001 per share.
Required:
- 1. Describe the effects that this transaction would have had on the company’s financial statements. Assume that 600 million shares were outstanding at the time of the transaction, trading at a stock price of $33.
TIP: Although the financial statements refer to a stock split, the transaction actually involved a 100% stock dividend. Large stock dividends, such as a 100% dividend, are recorded at par value.
- 2. Why might the board of directors have decided to declare a stock dividend rather than a stock split?
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On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 80 million, $1.00 par, common shares, to be
distributed on July 1. The market price of Siewert common stock was $22 on June 13.
Prepare a journal entry that summarizes the declaration and distribution of the stock split if it is to be effected in the form of a 100%
stock dividend. What is the par per share after the split?
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General
Journal
Prepare a journal entry that summarizes the declaration and distribution of the stock split if it is to be effected in the form of a
100% stock dividend. (If no entry is required for a transaction/event, select "No journal entry required" in the first account
field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)
No
1
Par value
Event
1
No journal entry required
Par value
General Journal
Par value >
On June 13, the board of directors of Siewert…
On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 80 million, $1.00 par, common shares, to be distributed on July 1. The market price of Siewert common stock was $22 on June 13. Prepare a journal entry that summarizes the declaration and distribution of the stock split if it is to be effected in the form of a 100% stock dividend. What is the par per share after the split?
On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 60 million, $1.00 par, common shares, to be
distributed on July 1. The market price of Siewert common stock was $25 on June 13.
Prepare the journal entry to record the stock split if it is to be effected in the form of a 100% stock dividend. What is the par per share
after the split?
Complete this question by entering your answers in the tabs below.
General
Journal
Par value
Prepare the journal entry to record the stock split if it is to be effected in the form of a 100% stock dividend. (If no entry is required for
a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should
be entered as 10).)
View transaction list
View journal entry worksheet
No
Event
General Journal
1
1
Paid-in capital-excess of par
Common stock
Debit
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Chapter 11 Solutions
Fundamentals of Financial Accounting
Ch. 11 - Prob. 1QCh. 11 - Prob. 2QCh. 11 - Prob. 3QCh. 11 - Explain each of the following terms: (a)...Ch. 11 - What are the differences between common stock and...Ch. 11 - What is the distinction between par value and...Ch. 11 - What are the usual characteristics of preferred...Ch. 11 - What items are included in Accumulated Other...Ch. 11 - What is treasury stock? Why do corporations...Ch. 11 - How is treasury stock reported on the balance...
Ch. 11 - What are the two financial requirements to support...Ch. 11 - What is the difference between cumulative and...Ch. 11 - What is a stock dividend? How does a stock...Ch. 11 - What are the primary reasons for issuing a stock...Ch. 11 - Your company has been very profitable and expects...Ch. 11 - Identify and explain four important dates with...Ch. 11 - Prob. 17QCh. 11 - How do stock repurchases affect the EPS and ROE...Ch. 11 - What is one interpretation of a high P/E ratio?Ch. 11 - Prob. 20QCh. 11 - Which feature is not applicable to common stock...Ch. 11 - Which statement regarding treasury stock is false?...Ch. 11 - Which of the following statements about stock...Ch. 11 - Which of the following is ordered from the largest...Ch. 11 - Prob. 5MCCh. 11 - A journal entry is not recorded on what date? a....Ch. 11 - Prob. 7MCCh. 11 - Prob. 8MCCh. 11 - Prob. 9MCCh. 11 - Equity versus Debt Financing Indicate whether each...Ch. 11 - Computing the Number of Issued Shares Face 2 Face...Ch. 11 - Computing the Number of Unissued Shares The...Ch. 11 - Analyzing and Recording the Issuance of Common...Ch. 11 - Analyzing and Recording the Issuance of No-Par...Ch. 11 - Determining the Effects of Stock Issuance and...Ch. 11 - Determining the Amount of a Dividend Netpass...Ch. 11 - Recording Dividends On May 20, the board of...Ch. 11 - Determining the Impact of a Stock Dividend Sturdy...Ch. 11 - Determining the Impact of a Stock Split Complete...Ch. 11 - Determining the Amount of a Preferred Dividend...Ch. 11 - Determining the Amount of a Preferred Dividend...Ch. 11 - Calculating and Interpreting Earnings per Share...Ch. 11 - Inferring Financial Information Using the P/E...Ch. 11 - (Supplement 11A) Comparing Owner's Equity to...Ch. 11 - (Supplement 11B) Recording a Stock Dividend To...Ch. 11 - Computing Shares Outstanding The 2013 annual...Ch. 11 - Reporting Stockholders' Equity and Determining...Ch. 11 - Preparing the Stockholders' Equity Section of the...Ch. 11 - Reporting the Stockholders' Equity Section of the...Ch. 11 - Determining the Effects of the Issuance of Common...Ch. 11 - Recording and Reporting Stockholders' Equity...Ch. 11 - Finding Amounts Missing from the Stockholders'...Ch. 11 - Recording Treasury Stock Transactions and...Ch. 11 - Prob. 11.9ECh. 11 - Prob. 11.10ECh. 11 - Recording Dividends and Preparing a Statement of...Ch. 11 - Analyzing Stock Dividends On December 31, the...Ch. 11 - Prob. 11.13ECh. 11 - Comparing 100 percent Stock Dividend and 2-for-1...Ch. 11 - Journalizing Cash Dividends Bogscraft Company has...Ch. 11 - Preparing a Statement of Retained Earnings and...Ch. 11 - Determining the Effect of a Stock Repurchase on...Ch. 11 - (Supplement 11 A) Comparing Stockholders' Equity...Ch. 11 - Prob. 11.19ECh. 11 - Analyzing Accounting Equation Effects, Recording...Ch. 11 - Recording Stock Dividends Activision Blizzard,...Ch. 11 - Finding Missing Amounts At December 31, the...Ch. 11 - Prob. 11.4CPCh. 11 - Prob. 11.5CPCh. 11 - Analyzing Accounting Equation Effects, Recording...Ch. 11 - Recording Cash Dividends National Chocolate Corp....Ch. 11 - Finding Missing Amounts At December 31, the...Ch. 11 - Calculating Common and Preferred Cash Dividends...Ch. 11 - Prob. 11.5PACh. 11 - Analyzing Accounting Equation Effects, Recording...Ch. 11 - Prob. 11.2PBCh. 11 - Prob. 11.3PBCh. 11 - Prob. 11.4PBCh. 11 - Prob. 11.5PBCh. 11 - COMPREHENSIVE PROBLEM Financial Reporting of...Ch. 11 - Recording Daily and Adjusting Entries, and...Ch. 11 - Finding Financial Information Refer to the...Ch. 11 - Prob. 11.2SDCCh. 11 - Prob. 11.4SDCCh. 11 - Prob. 11.5SDCCh. 11 - Critical Thinking: Making a Decision asan Investor...Ch. 11 - CC11 Accounting for Equity Financing Nicole has...
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