On January 1, BearBack Corporation had 300,000 common shares issued. On April 10, the company declared a 10% stock dividend to be distributed on April 30. The market value of the shares was $7 on April 10 and $10 on April 30. The entry to record the transaction of April 10 would include a
a) credit to Stock Dividends Distributable for $210,000.
b) debit to Stock Dividends Distributable for $300,000.
c) credit to Cash for $210,000.
d) credit to Retained Earnings for $30,000.
Correct answer-------------a) credit to Stock Dividends Distributable for $210,000.
.
Working
Shares Outstanding | 300000 |
Stock Dividend % | 10% |
New shares to be issued (300000 x 10%) | 30000 |
Market value per share | $ 7.00 |
Value of Stock Dividend (30000 x $7) | $ 210,000 |
Stock dividend will be debited by $210,000 and Stock dividend distributable will be credited by $210,000
Get Answers For Free
Most questions answered within 1 hours.