Question

The stockholders’ equity accounts of Pina Company have the following balances on December 31, 2017. Common stock, $10 par, 293,000 shares issued and outstanding $2,930,000 Paid-in capital in excess of par—common stock 1,190,000 Retained earnings 5,310,000 Shares of Pina Company stock are currently selling on the Midwest Stock Exchange at $33. Prepare the appropriate journal entries for each of the following cases. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (a) A stock dividend of 5% is (1) declared and (2) issued. (b) A stock dividend of 100% is (1) declared and (2) issued. (c) A 2-for-1 stock split is (1) declared and (2) issued. No. Account Titles and Explanation Debit Credit (a) (1) enter an account title for case A to record the declaration of stock dividends enter a debit amount enter a credit amount enter an account title for case A to record the declaration of stock dividends enter a debit amount enter a credit amount enter an account title for case A to record the declaration of stock dividends enter a debit amount enter a credit amount (a) (2) enter an account title for case A to record the issuance of stock dividends enter a debit amount enter a credit amount enter an account title for case A to record the issuance of stock dividends enter a debit amount enter a credit amount (b) (1) enter an account title for case B to record the declaration of stock dividends enter a debit amount enter a credit amount enter an account title for case B to record the declaration of stock dividends enter a debit amount enter a credit amount (b) (2) enter an account title for case B to record the issuance of stock dividends enter a debit amount enter a credit amount enter an account title for case B to record the issuance of stock dividends enter a debit amount enter a credit amount (c) (1) enter an account title for case C to record the declaration of the stock split enter a debit amount enter a credit amount enter an account title for case C to record the declaration of the stock split enter a debit amount enter a credit amount (c) (2) enter an account title for case C to record the issuance of the stock split enter a debit amount enter a credit amount enter an account title for case C to record the issuance of the stock split enter a debit amount

Answer 1

1)Number of shares issued as stock dividend =Number of shares outstanding*% of stock dividend

                   = 293000*5%

                   = 14650 shares

Date	Account title	Debit	credit
a	Retained earning (14650*33)	483450
	common stock dividend Distributable (14650*10)		146500
	Paid-in capital in excess of par—common stock		336950
b	common stock dividend Distributable	146500
	common stock		146500

2)

Number of shares issued as stock dividend =Number of shares outstanding*% of stock dividend

               = 293000*100%

                = 293000 shares.

Date	Account title	Debit	credit
a	Retained earning (293000*10)	2930000
	common stock dividend Distributable		2930000
b	common stock dividend Distributable	2930000
	common stock		2930000

3)stock split does not require any adjustment entry .The only adjustment is that number of shares outstanding after stock split is increased and par value gets decreased.

Number of shares outstanding after stock split = 293000*2/1 = 586000 shares

par value per share = 10*1/2 = $ 5 per share

Date	Account title	Debit	credit
a	No entry
b	No entry