Denim Industries has 1,000,000 shares of $10 par value common

Denim Industries has 1,000,000 shares of $10 par value common stock authorized, of which 400,000 shares have been issued and 380,000 are currently outstanding. On November 30, 2009, when the stock is trading at $40 per share, Denim declares a 10 percent stock dividend of stockholders of record on December 24, 2009. The stock dividend will be distributed on January 10, 2010.
Required:
(a) How many shares are in treasury on November 30?
(b) How many shares will be distributed on January 10, 2010?
(c) Prepare any necessary journal entries related to this stock dividend on the following dates:
(1) Date of declaration
(2) Date of record
(3) Date of distribution
(d)
On Denim’s December 31, 2009, balance sheet, will Denim show a liability for the value of the undistributed stock divided? Why or why not?
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
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...
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...