Question

X Pearson e Text Harmful metals in e-cigare x Pearson e Text n/eplayer/pdfbook?bookid=113333&platform=1030&scenario=1&invoketype=et1&pagenumle 715 WICE STICEL WAS LIUSIIN LIIC JULK DIVILICHILS ULLOUIL. E13-30 Journalizing cash and stock dividends Self-Defense Schools, Inc. is authorized to issue 200,000 shares of $2 par common stock. The company issued 73,000 shares at $5 per share. When the market price of common stock was $7 per share, Self-Defense Schools declared and distributed a 14% stock divi- dend. Later, Self-Defense Schools declared and paid a $0.70 per share cash dividend. Requirements 1. Journalize the declaration and the distribution of the stock dividend. 2. Journalize the declaration and the payment of the cash dividend.

Answer 1

% Format Cell Styles - Styles Sort Find Filter - Select board Font Alignment Number Cells X fr =73000*7*0.14 stock dividend 1 Journal entry for declaration: cash dividend 2 Journal entry for declaration: 58,254 Dr. Retained Earnings 71,5401 To Stock Dividends Distributable (73000 shares * $7 per share * 14% = 71,540) Dr. Retained Earnings( 83,220 shares* $0.70) To Dividends payable 71,540 58,254 Journal entry for distribution: Journal entry for distribution: 71,540 58,254 Dr. Stock Dividends Distributable To Common Stock (71,540 * 2/7) To Addition Paid-in Capital (71,540 * 5/7) Dr. Dividends payable To Bank Alc 58,254 20,440 51,100 Hence number of shares after distribution is: 73000+($20,440/$2)= 83,220 shares since par value of share is $2, 7-2 which is $5 is the additional paid in capital Sheet1