Question

Instructions Vincent Corporation has 95,000 shares of $110 par common stock outstanding. On June 30, Vincent Corporation declared a 6% stock dividend to be issued on July 30 to stockholders of record July 15. The market price of the stock was $118 a share on June 30. Required: Journalize the entries required on June 30 and July 30. i no entry is required, simply skip to the next transaction Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Number of shares outstanding = 95,000 Number of shares issued as dividend = 6% * 95,000 Number of shares issued as dividend=5,700 Increase in common stock = Number of shares issued as dividend * Par value per share Increase in common stock = 5,700 * $110 Increase in common stock = $627,000 Decrease in retained earnings = Number of shares issued as dividend * Market price pr share Decrease in retained earnings = 5,700 * $118 Decrease in retained earnings = $672,600 Increase in paid-in capital in excess of par, common stock = Decrease in retained earnings - Increase in common stock Increase in paid-in capital in excess of par, common stock = $672,600 - $627,000 Increase in paid-in capital in excess of par, common stock = $45,600 Credit Date June 30 Debit 672,600 General Journal Retained Earnings Common Stock Distributable Paid-in Capital in Excess of Par-Common Stock Common Stock Distributable Common Stock 627,000 45,600 July 30 627,000 627,000