The shareholders’ equity of Raven Company is as shown:

Raven Company

Partial Balance Sheet

1	Common stock, $10 par	$250,000.00
2	Additional Paid-in Capital on Common Stock	150,000.00
3	Retained Earnings	200,000.00
4		$600,000.00

Raven is considering the declaration and issuance of a stock dividend at a time when the market price is $30 per share.

Required:

1.	Assuming the board of directors recommends a 6% stock dividend, prepare:
a.	the journal entry at the date of declaration
b.	the journal entry at the date of issuance
c.	shareholders’ equity after the issuance
2.	Assuming, instead, that a 40% stock dividend is recommended, answer a, b, and c of Requirement 1.

Prepare the appropriate journal entries for the declaration on December 1 and payment or distribution of the dividend on December 15, assuming the board of directors recommends a 6% stock dividend.

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5

Prepare the appropriate journal entries for the declaration on December 1 and payment or distribution of the dividend on December 15, assuming the board of directors recommends a 40% stock dividend.

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4

Prepare the shareholders’ equity section of Raven’s balance sheet at December 31, assuming the board of directors recommends a 6% stock dividend.

Raven Company

Partial Balance Sheet

December 31, 2016

1	Common Stock
2	Additional Paid-in Capital on Common Stock
3	Additional Paid-in Capital from Stock Dividend
4	Retained Earnings
5

Prepare the shareholders’ equity section of Raven’s balance sheet at December 31, assuming the board of directors recommends a 40% stock dividend.

Raven Company

Partial Balance Sheet

December 31, 2016

1	Common Stock
2	Additional Paid-in Capital on Common Stock
3	Retained Earnings
4