Question

The stockholders’ equity of Poolside Occupational Therapy, Inc. on December 31, 2015 follows:
Stockholders' Equity
Paid-In Capital:
Common Stock—$2 Par Value; 1,600 shares authorized, 600 shares issued and outstanding ................... $1,200
Paid-In Capital in Excess of Par—Common ...... 2,400
Total Paid-In Capital ............... 3,600
Retained Earnings ............... 124,000
Total Stockholders' Equity ............ $ 127,600
On April 30, 2016, the market price of Poolside’s common stock was $15 per share and the company declared a 8% stock dividend. The stock was distributed on May 15.
Requirements
1. Journalize the declaration and distribution of the stock dividend.
2. Prepare the stockholders’ equity section of the balance sheet as of May 31, 2016. Assume Retained Earnings are $124,000 on April 30, 2016, before the stock dividend, and the only change made to Retained Earnings before preparing the balance sheet was closing the Stock Dividends account.


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  • CreatedJune 15, 2015
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