The capital accounts for Shop Right Market on June 30, 2008, are as follows: Common stock, $5

Question:

The capital accounts for Shop Right Market on June 30, 2008, are as follows:

Common stock, $5 par, 40,000 shares issued and outstanding . . . $ 200,000

Paid-in capital in excess of par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 835,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,160,000

Shares of the company’s stock are selling at this time at $22. What entries would you make in each of the following cases?

(a) A 10% stock dividend is declared and issued.

(b) A 50% stock dividend is declared and issued.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...