The stockholders equity for Dairy Place Drive-Ins (DP) on December 31, 2012, follows: On April 16, 2013,
Question:
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On April 16, 2013, the market price of DP common stock was $20 per share. Assume DP distributed an 18% stock dividend on this date.
Requirements
1. Journalize the distribution of the stock dividend.
2. Prepare the stockholders€™ equity section of the balance sheet after the stock dividend.
3. Why is total stockholders€™ equity unchanged by the stock dividend?
4. Suppose DP had a cash balance of $580,000 on April 17, 2013. What is the maximum amount of cash dividends DP can declare?
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... 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...
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Related Book For 
Financial accounting
ISBN: 978-0132751124
9th edition
Authors: Walter T. Harrison Jr., Charles T. Horngren, C. William Thom
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