Question

Pro-Builders Corporation has 1,500,000 shares of $5 par common stock outstanding. On September 2, Pro-Builders Corporation declared a 3% stock dividend to be issued November 30 to stockholders of record on October 3. The market price of the stock was $36 per share on September 2.

Journalize the entries required on September 2, October 3, and November 30. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Pro-Builders Corporation

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Merchandise Inventory
145	Office Supplies
151	Prepaid Insurance
181	Land
193	Equipment
194	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
226	Interest Payable
231	Cash Dividends Payable
236	Stock Dividends Distributable
241	Salaries Payable
261	Mortgage Note Payable

EQUITY

311

Common Stock

312

Paid-In Capital in Excess of Par-Common Stock

315

Treasury Stock

321

Preferred Stock

322

Paid-In Capital in Excess of Par-Preferred Stock

331

Paid-In Capital from Sale of Treasury Stock

340

Retained Earnings

351

Cash Dividends

352

Stock Dividends

390

Income Summary

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5

Answer 1

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1	02-Sep	Stock Dividends [1500000 shares x 3% x $ 36]	352	$1,620,000				Decease
2		Stock Dividend distributable [1500000 shares x 3% x $ 5 par]	236		$225,000		Increase
3		Paid in Capital in excess of par - common stock [1500000 shares x 3% x $ 31]	312		$1,395,000			Increase
		(to record declaration)
	3 Oct	[No entry on record date required]
4	30-Nov	Stock Dividend distributable	236	$225,000			Decrease
5		Common Stock	311		$225,000			Increase
		(to record distributation)