The shareholders equity of Raven Company is as shown: Raven Company Partial Balance Sheet 1 Common stock,
Question:
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. |
Prepare the appropriate journal entries for the declaration on December 1 and payment or distribution of the dividend on December 15, assuming the board of directors recommends a 6% stock dividend.
PAGE 1
GENERAL JOURNAL
| DATE | ACCOUNT TITLE | POST. REF. | DEBIT | CREDIT | |
|---|---|---|---|---|---|
1 | |||||
2 | |||||
3 | |||||
4 | |||||
5 |
Prepare the appropriate journal entries for the declaration on December 1 and payment or distribution of the dividend on December 15, assuming the board of directors recommends a 40% stock dividend.
PAGE 1
GENERAL JOURNAL
| DATE | ACCOUNT TITLE | POST. REF. | DEBIT | CREDIT | |
|---|---|---|---|---|---|
1 | |||||
2 | |||||
3 | |||||
4 |
Prepare the shareholders’ equity section of Raven’s balance sheet at December 31, assuming the board of directors recommends a 6% stock dividend.
Raven Company |
Partial Balance Sheet |
December 31, 2016 |
1 | Common Stock | |
2 | Additional Paid-in Capital on Common Stock | |
3 | Additional Paid-in Capital from Stock Dividend | |
4 | Retained Earnings | |
5 |
Prepare the shareholders’ equity section of Raven’s balance sheet at December 31, assuming the board of directors recommends a 40% stock dividend.
Raven Company |
Partial Balance Sheet |
December 31, 2016 |
1 | Common Stock | |
2 | Additional Paid-in Capital on Common Stock | |
3 | Retained Earnings | |
4 |
Expert Answer:
The detailed answer for the above question is provided below Lets go through each requirement step by step Requirement 1 A 6 Stock Dividend a Journal ... View the full answer
