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On January 1, 2020, Cullumber Corporation had $1,125,000 of common stock outstanding that was issued at...

On January 1, 2020, Cullumber Corporation had $1,125,000 of common stock outstanding that was issued at par. It also had retained earnings of $746,500. The company issued 40,000 shares of common stock at par on July 1 and earned net income of $410,000 for the year. Journalize the declaration of a 16% stock dividend on December 10, 2020, for the following independent assumptions. (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. Par value is $10, and market price is $19. b. Par value is $5, and market price is $20.

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Answer #1
a) par value $10
number of shares oustanding
Jan 1,2020 (1,125,000/10)= 112500
1-Jul 40,000
total shares outstanding 152500
Stock dividend 16%
stock dividend 24400
Journal entry
Date Account titles & explanation Debit Credit
12/10/2020 Stock dividend 463600
Stock dividend distributable 244000
paid in capital in excess of par-CS 219600
b) par value $5
number of shares oustanding
Jan 1,2020 (1,125,000/5)= 225000
1-Jul 40,000
total shares outstanding 265000
Stock dividend 16%
stock dividend 42400
Journal entry
Date Account titles & explanation Debit Credit
12/10/2020 Stock dividend 848000
Stock dividend distributable 212000
paid in capital in excess of par-CS 636000
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