Question

Problem 18-6    The shareholders’ equity of Core Technologies Company on June 30, 2017,included the following:

Common stock, $1 par; authorized, 7 million shares:

     Issued and outstanding, 3 million shares                                          $ 3,000,000

Paid-in capital-excess of par $12,000,000

Retained earnings                                                                                  10,000,000

On April , 2018, 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 $24 on April 1, 2018, and $34 on June 1, 2018.

Required:

Complete the below table to calculate the stock dividend. Prepare the journal entries to record the

Declaration and distribution of the stock dividend.

Stock Dividend
Number of outstanding shares
Stock dividend percentage (%)
Number of shares to be issued
Value of stock dividend	$                0

Prepare the journal entries to record the declaration and distribution of the stock dividend. (If no entry is required for a transaction/event, type “No journal entry required” in the first account field.)

Date	General Journal	Debit	Credit
April 01, 2018

Answer 1

Complete the below table to calculate the stock dividend. Prepare the journal entries to record the

Declaration and distribution of the stock dividend.

Stock Dividend
Number of outstanding shares	3000000
Stock dividend percentage (%)	10%
Number of shares to be issued	300000
Market price per share	24
Value of stock dividend	$7200000

Prepare the journal entries to record the declaration and distribution of the stock dividend. (If no entry is required for a transaction/event, type “No journal entry required” in the first account field.)

Date	General Journal	Debit	Credit
April 01, 2018	Stock dividend	7200000
	Common stock dividend distributable		300000
	Paid in capital in excess of par value-Common stock		6900000
June 1	Common stock dividend distributable	300000
	Common Stock		300000