Question

QS 11-7 Accounting for small stock dividend LO P2 The stockholders' equity section of Jun Company's balance sheet as of April 1 follows. On April 2, Jun declares and distributes a 10% stock dividend. The stock's per share market value on April 2 is $20 (prior to the dividend). Common stock-$5 par value, 375, 000 shares authorized, 200,000 shares issued and outstanding $1,000,000 Paid-in capital in excess of par value, common stock 600,000 Retained earnings 833,000 Total stockholders' equity $2,433,000 Prepare the stockholders' equity section immediately after the stock dividend. 19 JUN COMPANY Stockholders' Equity April 2 (after stock dividend) Common stock Paid-in capital in excess of par value, common stock Total paid-in capital "Retained earnings Total stockholders' equity

Answer 1

Answer: JUN COMPANY Stockholders Equity April 2 (After Stock Dividend) Common Stock Paid in Capital in Excess of Par Value, Common Stock Total Paid in Capital Retained Earnings Total Stockholders Equity 1100000 900000 2000000 433000 2433000 Calculation: Common Stock = 220,000 * $5 = $1,100,000 Addition Paid in Capital in Excess of Par, Common Stock = 200,000 shares * 10%* ($20 - $5) Addition Paid in Capital in Excess of Par, Common Stock = $300,000 Total Paid in Capital in Excess of Par Value, Common Stock = $600,000 + $300,000 Total Paid in Capital in Excess of Par Value, Common Stock = $900,000