On December 15, 2021, Tripod Inc.’s stock was trading at $3 per share and had the following balances in their equity accounts:
Common Stock ($0.10 Par) 1,000,000
Paid-in-Capital—excess of par, common 6,780,000

Retained Earnings 4,672,000
a. (4%) If Tripod declared and paid a 30% stock dividend, what is the impact of the dividend on Retained Earnings and Paid-in-Capital?
b. (4%) If Tripod declared and paid a 20% stock dividend, what is the impact of the dividend on Retained Earnings and Paid-in-Capital?
c. (6%) Instead of declaring a stock dividend, Tripod Inc. declared a property dividend of the company’s investment in Bad Investments on December 15, 2021. The carrying value of the Bad Investments stock is $6,000,000 and the fair market value is $5,000,000. Prepare the journal entries related to the property dividend declaration.
d. (2%) Prepare the journal entry to record the property dividend payment.

Answer rating: 100% (QA)

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