Question

The shareholders’ equity of Core Technologies Company on June 30, 2020, included the following:

Common stock, $1 par; authorized, 4 million shares; issued and outstanding, 1 million shares	$	1,000,000
Paid-in capital—excess of par		4,000,000
Retained earnings		13,000,000

On April 1, 2021, 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 $30 on April 1, 2021, and $40 on June 1, 2021.

Required:
Complete the below table to calculate the stock dividend. Prepare the journal entries to record the declaration and distribution of the stock dividend.

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 $0

Record the declaration of the stock dividend.

Record the distribution of the stock dividend.

Answer 1

Complete the below table to calculate the stock dividend.

	Stock Dividend Number of outstanding shares 1000000 Stock dividend percentage (%) 10 % Number of shares to be issued 100000 Market value per share 30 Value of stock dividend $3000000

Journal entry

Date	account and explanation	Debit	Credit
Apr 1	Stock dividend	3000000
	Common Stock Dividend distributable		100000
	Paid in capital in excess of par value-Common Stock		2900000
	(To record stock dividend declared)
June 1	Common Stock Dividend distributable	100000
	Common Stock		100000
	(To record stock dividend distributed)