The stockholders’ equity of Poolside Occupational Therapy, Inc. on December

The stockholders’ equity of Poolside Occupational Therapy, Inc. on December 31, 2015 follows:
Stockholders' Equity
Paid-In Capital:
Common Stock—$2 Par Value; 1,600 shares authorized, 600 shares issued and outstanding................... $1,200
Paid-In Capital in Excess ofPar—Common ...... 2,400
Total Paid-In Capital............... 3,600
Retained Earnings............... 124,000
Total Stockholders' Equity............$ 127,600
On April 30, 2016, the market price of Poolside’s common stock was $15 per share and the company declared a 8% stock dividend. The stock was distributed on May 15.
Requirements
1. Journalize the declaration and distribution of the stock dividend.
2. Prepare the stockholders’ equity section of the balance sheet as of May 31, 2016. Assume Retained Earnings are $124,000 on April 30, 2016, before the stock dividend, and the only change made to Retained Earnings before preparing the balance sheet was closing the Stock Dividends account.
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...
Balance Sheet
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...

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