Question

Pacifica Papers Inc. needed to conserve cash, so instead of a cash dividend the board of directors declared a 5% common share dividend on June 30, 2020, distributable on July 15, 2020. Because performance during 2020 was better than expected, the company’s board of directors declared a $0.95 per share cash dividend on November 15, 2020, payable on December 1, 2020, to shareholders of record on November 30, 2020. The equity section of Pacifica’s December 31, 2019, balance sheet showed:

Common shares, unlimited shares authorized, 850,000 shares issued and outstanding	$	7,310,000
Retained earnings		2,800,000

Required: 1. Journalize the declaration of the share dividend. The market prices of the shares were $17.90 on June 30, 2020, and $19.90 on July 15, 2020. Assume share dividends account is used when dividends are declared. View transaction list Journal entry worksheet Record the share dividends declared. Note: Enter debits before credits. Date Debit Credit June 30, 2020 General Journal Share dividends Common share dividends distributable Record entry Clear entry View general journal

Answer 1

» June 30, 2020 Relauned earning by 760750 Shoue poudende 365500 destributable Paid in excess of 395250 peu Stock dividend - 850oo0x5% z 42500 X 17.9 760750 Stoce dividend distributable Dr 365500 Common shocle 365500

(2) Nou is, Retained Eamings Dr 807500 - 2020 Dindend Payable 807500 y section of Balance sheet Dec 31, 2020 Contributed capita Common shares.'( 892500 X806) 7675500 Returned eaming 12 31750 Paud in Capital in exces of par 395,50 Total equity 9302500