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Part $1$

Requirement $1.$ Journalize the declaration and distribution of the $12\%$ stock dividend. $($Record debits$$ first, then credits. Exclude explanations from any journal$$ entries.$)$

Journal Entry

Date

Accounts

Debit

Credit

October

$15$

Retained Earnings

$1140000$

Common Stock

$24,000$

Paid$-$in Capital in Excess of Par$$Common

$1116000$

Part $2$

Requirement $2.$ Prepare the$$ stockholders' equity section of the balance sheet after the stock dividend. $($Enter the accounts in the proper order for the$$ stockholders' equity section of the balance sheet. Use parentheses or a minus sign for numbers to be$$ subtracted.$)$

Balance Sheet $($Partial$)$

Stockholders' Equity:

Common stock,

$

$\mathrm{.}40$

par,

$2,300,000$

shares

authorized,

shares

issued and outstanding.

$224,000$

Total paid$-$in capital

Total stockholders' equity

Part $3$

Requirement $3.$ Why is total$$ stockholders' equity unchanged by the stock$$ dividend?

The stock dividend did not change total$$ stockholders' equity because the company gave its shareholders

$$

a promissory note

cash

no assets

$.$ The company merely

$$

agreed to pay later.

issued dividend checks totaling $$1,140,000.$

transferred $$1,140,000$ from Retained Earnings to Common Stock and Paid$-$in Capital in Excess of Par.

Part $4$

Requirement $4.$ Suppose ST had a cash balance of $ $620$ comma $000$ on October $16,2019.$ What is the maximum amount of cash dividends the company can$$ declare?

ST$\text{'}$s maximum cash dividends

$$

are unlimited.

cannot exceed the balance in the Cash account, $$620,000$

cannot exceed the balance in the Common Stock account, $$224,000$

cannot exceed the balance in the Retained Earnings account, $$6,037,000$

$.$Read the requirementsLOADING....

Question content area bottom

Part $1$

Requirement $1.$ Journalize the declaration and distribution of the $12\%$ stock dividend. $($Record debits$$ first, then credits. Exclude explanations from any journal$$ entries.$)$

Journal Entry

Date

Accounts

Debit

Credit

October

$15$

Retained Earnings

$1140000$

Common Stock

$24,000$

Paid$-$in Capital in Excess of Par$$Common

$1116000$

Part $2$

Requirement $2.$ Prepare the$$ stockholders' equity section of the balance sheet after the stock dividend. $($Enter the accounts in the proper order for the$$ stockholders' equity section of the balance sheet. Use parentheses or a minus sign for numbers to be$$ subtracted.$)$

Balance Sheet $($Partial$)$

Stockholders' Equity:

Common stock,

$

$\mathrm{.}40$

par,

$2,300,000$

shares

authorized,

shares

issued and outstanding.

$224,000$

Total paid$-$in capital

Total stockholders' equity

Part $3$

Requirement $3.$ Why is total$$ stockholders' equity unchanged by the stock$$ dividend?

The stock dividend did not change total$$ stockholders' equity because the company gave its shareholders

$$

a promissory note

cash

no assets

$.$ The company merely

$$

agreed to pay later.

issued dividend checks totaling $$1,140,000.$

transferred $$1,140,000$ from Retained Earnings to Common Stock and Paid$-$in Capital in Excess of Par.

Part $4$

Requirement $4.$ Suppose ST had a cash balance of $ $620$ comma $000$ on October $16,2019.$ What is the maximum amount of cash dividends the company can$$ declare?

ST$\text{'}$s maximum cash dividends

$$

are unlimited.

cannot exceed the balance in the Cash account, $$620,000$

cannot exceed the balance in the Common Stock account, $$224,000$

cannot exceed the balance in the Retained Earnings account, $$6,037,000$

Data table