Question

The shareholders’ equity of Core Technologies Company on June 30, 2015, included the following:

Common stock, $1 par; authorized, 8 million shares;      issued and outstanding, 3 million shares	$	3,000,000
Paid-in capital—excess of par		12,000,000
Retained earnings		19,000,000

On April 1, 2016, 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 $34 on April 1, 2016, and $44 on June 1, 2016.

Required:

Complete the below table to calculate the stock dividend.

Stock Dividend
Number of outstanding shares
Stock dividend percentage
Number of shares to be issued
Value of stock dividend

Prepare the journal entries to record the declaration and distribution of the stock dividend. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1 Record the declaration of the stock dividend.
2 Record the distribution of the stock dividend.
?

Answer 1

Stock Dividend
Number of outstanding shares	3,000,000
Stock dividend percentage	10%
Number of shares to be issued	300,000
Value of stock dividend (300,000 shares*$34)	$ 10,200,000.00

Date	Account titles and explanation	Debit	Credit
April 1, 2016	Retained earnings	$ 10,200,000.00
	Stock dividend distributable (300,000 shares*$1)		$ 300,000.00
	Paid in capital - excess of par (300,000 shares*$33)		$ 9,900,000.00
	(To record declaration of stock dividend)
June 1, 2016	Stock dividend distributable	$ 300,000.00
	Common stock		$ 300,000.00
	(To record distribution of stock dividend)