Question

Entries for Stock Dividends

Senior Life Co. is an HMO for businesses in the Portland area. The following account balances appear on the balance sheet of Senior Life Co.: Common stock (340,000 shares authorized; 3,000 shares issued), $50 par, $150,000; Paid-In Capital in excess of par— common stock, $30,000; and Retained earnings, $1,800,000. The board of directors declared a 1% stock dividend when the market price of the stock was $69 a share. Senior Life Co. reported no income or loss for the current year.

If an amount box does not require an entry, leave it blank. If no entry is required, select "No entry required" from the dropdown.

a1. Journalize the entry to record the declaration of the dividend, capitalizing an amount equal to market value.

		fill in the blank 9ae9cc07a031ffd_2	fill in the blank 9ae9cc07a031ffd_3
		fill in the blank 9ae9cc07a031ffd_5	fill in the blank 9ae9cc07a031ffd_6
		fill in the blank 9ae9cc07a031ffd_8	fill in the blank 9ae9cc07a031ffd_9

a2. Journalize the entry to record the issuance of the stock certificates.

		fill in the blank 0575b6098faefab_2
			fill in the blank 0575b6098faefab_4

b. Determine the following amounts before the stock dividend was declared: (1) total paid-in capital, (2) total retained earnings, and (3) total stockholders' equity.

Total paid-in capital	$fill in the blank 16033d07203efb2_1
Total retained earnings	$fill in the blank 16033d07203efb2_2
Total stockholders' equity	$fill in the blank 16033d07203efb2_3

c. Determine the following amounts after the stock dividend was declared and closing entries were recorded at the end of the year: (1) total paid-in capital, (2) total retained earnings, and (3) total stockholders' equity.

Total paid-in capital	$fill in the blank 16033d07203efb2_4
Total retained earnings	$fill in the blank 16033d07203efb2_5
Total stockholders' equity	$fill in the blank 16033d07203efb2_6

Answer 1

a1
Stock Dividends	2070		=3000*1%*69
Stock Dividends Distributable		1500	=3000*1%*50
Paid in Capital in excess of par-Common Stock		570
a2
Stock Dividends Distributable	1500
Common Stock		1500
b
Total paid in Capital	180000		=150000+30000
Total Retained Earnings	1800000
Total Stockholders' Equity	1980000
c
Total paid in Capital	182070		=180000+2070
Total Retained Earnings	1797930		=1800000-2070
Total Stockholders' Equity	1980000