Question: Hodges Inc has ten million shares of 5 par value

Hodges, Inc. has ten million shares of $5 par value common stock authorized. Of that amount, 4.6 million have been issued and 4.2 million are outstanding. On July 2, Hodges declared a 5 percent stock dividend to shareholders of record on July 31, distributable on August 8. On July 2, Hodges stock was trading at $18 per share.
(a) Related to this stock dividend, will the balance in any of the following accounts be affected? Explain.
(1) Cash
(2) Retained Earnings
(3) Treasury Stock
(b) How many shares are held by Hodges in the treasury? Will those shares receive the dividend? Why or why not?
(c) How many shares will be distributed in the stock dividend?
(d) Record the journal entries related to this stock dividend on the following dates:
(1) July 2
(2) July 31
(3) August 8

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  • CreatedMarch 27, 2015
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