Beachcomber Pool Supply Inc. has 17,000 common shares outstanding for a total contributed capital value of $46,000. Beachcomber declares a 10 percent stock dividend on July 15 when the market value of its shares is $9 per share. The date of record is August 15 and the distribution date is August 31. 

a). Journalize the declaration of the stock dividend on July 15 and the distribution on August 31. 

b). What is the overall effect on Beachcomber's total assets? 

c). What is the overall effect on total shareholders' equity? 

d. If Beachcomber declared a 2-for-1 stock split instead of a stock dividend, what would be the journal entry on July 15? On August 31? 

e). What would be the effect of the stock split on shareholders' equity?

Answer rating: 100% (QA)

Solution a Journal Entry Date Particulars Debit Credit July 15 Retained Earnings 15300 To Common ... View the full answer