Exercise 13-41

The capital accounts for Alston Market on June 30, 2015 are as follows:

Common Stock, $6 par, 50,000 shares issued and outstanding…………………..$300,000

Paid-in Capital in excess of par……………………………………………………………………..600,000

Retained earnings……………………………………………………………………………………...1,840,000

Shares of the company’s stock are selling at this time at $44. What entries would you make in each of the following cases?

(a) A 10% stock dividend is declared and issued.

(b) A 50% stock dividend is declared and issued.

Exercise 13-41

	Enter the appropriate amounts/formulas in the blue-shaded cells, or select from the drop-down list.


(a)	Journal entries - 10% stock dividend recorded at market value:
		Account Title	Debit		Credit








		Supporting calculation:
		Outstanding shares
		x Stock dividend declared (percentage)
		Additional shares
		x New market value
		Total market value of new shares


(b)	Journal entries - 50% stock dividend recorded at par value:
		Account Title	Debit		Credit







		Supporting calculation:
		Outstanding shares
		x Stock dividend declared (percentage)
		Additional shares
		x Par value
		Total value of new shares at par


(c)	Journal entries - a 2-for-1 stock split:
		Account Title	Debit		Credit



		A memorandum entry would disclose the
		decrease in par value from $6 to		par value
		and the increase in shares oustanding
		from 50,000 to		shares outstanding

assignment

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