Question

The stockholders’ equity accounts of Grouper Company have the following balances on December 31, 2020. Common...

The stockholders’ equity accounts of Grouper Company have the following balances on December 31, 2020.

Common stock, $10 par, 304,000 shares issued and outstanding $3,040,000
Paid-in capital in excess of par—common stock 1,290,000
Retained earnings 5,340,000


Shares of Grouper Company stock are currently selling on the Midwest Stock Exchange at $40.

Prepare the appropriate journal entries for each of the following cases. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

(a) A stock dividend of 7% is (1) declared and (2) issued.
(b) A stock dividend of 100% is (1) declared and (2) issued.
(c) A 2-for-1 stock split is (1) declared and (2) issued.

No.

Account Titles and Explanation

Debit

Credit

(a) (1)

enter an account title for case A to record the declaration of stock dividends enter a debit amount enter a credit amount
enter an account title for case A to record the declaration of stock dividends enter a debit amount enter a credit amount
enter an account title for case A to record the declaration of stock dividends enter a debit amount enter a credit amount

(a) (2)

enter an account title for case A to record the issuance of stock dividends enter a debit amount enter a credit amount
enter an account title for case A to record the issuance of stock dividends enter a debit amount enter a credit amount

(b) (1)

enter an account title for case B to record the declaration of stock dividends enter a debit amount enter a credit amount
enter an account title for case B to record the declaration of stock dividends enter a debit amount enter a credit amount

(b) (2)

enter an account title for case B to record the issuance of stock dividends enter a debit amount enter a credit amount
enter an account title for case B to record the issuance of stock dividends enter a debit amount enter a credit amount

(c) (1)

enter an account title for case C to record the declaration of the stock split enter a debit amount enter a credit amount
enter an account title for case C to record the declaration of the stock split enter a debit amount enter a credit amount

(c) (2)

enter an account title for case C to record the issuance of the stock split enter a debit amount enter a credit amount
enter an account title for case C to record the issuance of the stock split enter a debit amount enter a credit amount

Homework Answers

Answer #1

Solution-

No. Account Titles and Explanation Debit ($) Credit ($)
(a) (1) Retained earnings [304000 * 7% * 40] 851200
Common stock dividend distributable [304000 * 7% * 10] 212800
Paid in capital in excess of par-common stock 638400
(a) (2) Common stock dividend distributable 212800
Common stock 212800
(b) (1) Retained earnings [304000 * 100% * 10] 3040000
Common stock dividend distributable 3040000
(b) (2) Common stock dividend distributable 3040000
Common stock 3040000
(c) (1) No entry 0
No entry 0
(c) (2) No entry 0
No entry 0
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