If the Stock Dividends < 25%, recorded at fair market value. If the Stock Dividends >...

 

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If the Stock Dividends < 25%, recorded at fair market value. If the Stock Dividends > 25%, recorded at book value. Example1: Velvet Company has 5,000 shares issued and outstanding. Par value is $1; book value $32 and market value is $40. Instruction: prepare the entries at the different following situations 1- 10% stock dividend is declared (market value $40) 2- 50% stock dividend is declared (book value $32) If the Stock Dividends < 25%, recorded at fair market value. If the Stock Dividends > 25%, recorded at book value. Example1: Velvet Company has 5,000 shares issued and outstanding. Par value is $1; book value $32 and market value is $40. Instruction: prepare the entries at the different following situations 1- 10% stock dividend is declared (market value $40) 2- 50% stock dividend is declared (book value $32)

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1 10 stock dividend is declared market value 40 In this scenario since the stock dividend is less th... View the full answer