Supreme Water Sports has 12,000 shares of $ 2 par value common stock outstanding. Supreme distributes a

Question:

Supreme Water Sports has 12,000 shares of $ 2 par value common stock outstanding. Supreme distributes a 5% stock dividend when the market value of its stock is $ 22 per share.

Requirements

1. Journalize Supreme’s declaration of the stock dividend on August 15 and distribution on August 31.

2. What is the overall effect of the stock dividend on Supreme’s total assets?

3. What is the overall effect on total stockholders’ equity?

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,...