Recording Stock Dividends and Stock Splits The records of Dixie Corporation showed the following balances on November 1, 2020. Common stock, $10 par, 48,000 shares outstanding $480,000 Paid-in capital in excess of par 163,200 320,000 Retained earnings The fair value of its stock is $18 per share. Accounting for Stock Dividends Accounting for Stock Splits Prepare journal entries for the following three separate scenarios. a. The company declares (November 1, 2020) and issues (November 20, 2020) a 10 % stock dividend. b. The company declares (November 1, 2020) and issues (November 20, 2020) a 10 % stock dividend. Of the 4,800 stock dividend shares, 4,480 shares are whole shares and 320 shares are fractional shares. It is the company's policy to pay out fractional shares in cash. c. The company declares (November 1, 2020) and issues (November 20, 2020) a stock split effected in the form of a 100% stock dividend. • Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. • Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).
Recording Stock Dividends and Stock Splits The records of Dixie Corporation showed the following balances on November 1, 2020. Common stock, $10 par, 48,000 shares outstanding $480,000 Paid-in capital in excess of par 163,200 320,000 Retained earnings The fair value of its stock is $18 per share. Accounting for Stock Dividends Accounting for Stock Splits Prepare journal entries for the following three separate scenarios. a. The company declares (November 1, 2020) and issues (November 20, 2020) a 10 % stock dividend. b. The company declares (November 1, 2020) and issues (November 20, 2020) a 10 % stock dividend. Of the 4,800 stock dividend shares, 4,480 shares are whole shares and 320 shares are fractional shares. It is the company's policy to pay out fractional shares in cash. c. The company declares (November 1, 2020) and issues (November 20, 2020) a stock split effected in the form of a 100% stock dividend. • Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. • Note: If a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero).
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 57E: Outstanding Stock Lars Corporation shows the following information in the stockholders equity...
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Step 1: Introduction of stock dividend and stock split
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VIEWStep 3: Requirement 2(1) - Prepare the journal entries
VIEWStep 4: Requirement 2(2) - Computation of the total number of shares & the par value after stock split
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