Question

Bercise 14-03-b (Video) On January 1, 2020, Pharoah Corporation had $1,100,000 of common stock outstanding that was issued at par. It also had retained earnings of $742,500. The company issued 41,000 shares of common stock at par on July 1 and eamed net income of $405,000 for the year Journalize the declaration of a 15% stock dividend on December 10, 2020, for the following independent assumptions. (Credit account s are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the accounts and enter for the amounts) Par value is $10, and market price is $18. Par value is $5, and market price is $22. Account Titles and Explanation Credit

Answer 1

Solution a:

Journal Entries - Pharoah Corporation
Date	Particulars	Debit	Credit
10-Dec	Stock dividends Dr (151000*15%*$18)	$407,700.00
	To Common stock dividend distributable		$226,500.00
	To Paid in capital in excess of par - common stock		$181,200.00
	(To record stock dividend declared)

Solution b:

Journal Entries - Pharoah Corporation
Date	Particulars	Debit	Credit
10-Dec	Stock dividends Dr (261000*15%*$22)	$861,300.00
	To Common stock dividend distributable		$195,750.00
	To Paid in capital in excess of par - common stock		$665,550.00
	(To record stock dividend declared)