Question

The stockholders’ equity section of the balance sheet for the Ace Company appeared as follows before...

The stockholders’ equity section of the balance sheet for the Ace Company appeared as follows before their recent stock dividend:

Common Stock, $5 par, 100,000 shares issued and outstanding $ 500,000

Paid in Capital in Excess of Par $ 750,000

Retained Earnings $ 800,000

Total Stockholders’ Equity $ 2,050,000

The company declared a 10% stock dividend when the market price per share was $12. In the space provided, write in the amounts of each of the components of the stockholders’ equity section, after the stock dividend was distributed.

Common Stock¬ $__________________

Paid in Capital in Excess of Par $__________________

Retained Earnings $__________________

Business   Accounting   
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Answer #1
Journal entry for stock dividend
Retained earnings 120000 (100000*10%*12)
              Common stock 50000 (100000*10%*5)
               Paid in capita in excess of par 70000 (100000*10%*7)
Common stock 110000@5par 550000 (500000+50000)
Paid in capital in excess of par 820000 (750000+70000)
Retained earnings 680000 (800000-120000)
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