Question

The shareholders' equity accounts of Grouper Inc. have the following balances on December 31, 2020:
Common shares, 420,000 shares issued and outstanding $ 9,240,000
Contributed surplus
500,000
Retained earnings
42,600,000
Common shares are currently trading on the Toronto Stock Exchange at $51.
1. A stock dividend of 15% is declared and issued at the fair value of the shares. Prepare the appropriate journal entries.
Account Titles and Explanation
Debit
Credit
(To record declaration of stock dividend)
(To record distribution of stock dividend)
2. A stock dividend of 100% is declared and issued at the fair value of the shares. Prepare the appropriate journal entries.
Account Titles and Explanation
Debit
Credit
(To record declaration of stock dividend)
(To record distribution of stock dividend)
3. A 2-for-1 stock split is declared and issued. Prepare the appropriate journal entry.
Debit
Credit
Account Titles and Explanation

Answer 1

Journal entries

No	General Journal	Debit	Credit
1	Stock dividend (420000*15%*51)	3213000
	Common Stock dividend distributable (420000*15%*22)		1386000
	Paid in capital in excess of par-Common Stock		1827000
	Common Stock dividend distributable	1386000
	Common Stock		1386000
2	Stock dividend	9240000
	Common Stock dividend distributable		9240000
	Common Stock dividend distributable	9240000
	Common Stock		9240000
3	No Journal entry