Question

The shareholders’ equity of Core Technologies Company on June 30, 2017, included the following:

Common stock, $1 par; authorized, 5 million shares; issued and outstanding, 2 million shares	$	2,000,000
Paid-in capital—excess of par		8,000,000
Retained earnings		14,000,000

On April 1, 2018, the board of directors of Core Technologies declared a 10% stock dividend on common shares, to be distributed on June 1. The market price of Core Technologies’ common stock was $32 on April 1, 2018, and $42 on June 1, 2018.

Complete the below table to calculate the stock dividend. Prepare the journal entries to record the declaration and distribution of the stock dividend.

Answer 1

Table

Number of share outstanding	2000000
Stock dividend rate	10%
Stock dividend shares	200000
Market price per share	32
Stock dividend value	6400000

Journal entry

date	account and explanation	debit	credit
Apr 1	Retained earnings	6400000
	Common Stock dividend distributable		200000
	Paid in capital in excess of par value-Common Stock		6200000
	(To record stock dividend declared)
June 1	Common Stock dividend distributable	200000
	Common Stock		200000
	(to record stock dividend distribution)

Note : there is no table given so i have done with assumed table.