Question

The shareholders' equity accounts of Grouper Inc. have the following balances on December 31, 2020: Common...

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

Homework Answers

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
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