Journalizing a stock dividend and reporting stockholders’ equity [10-15 min]
The stockholders’ equity of Pondside Occupational Therapy, Inc., on December 31, 2011, follows:
STOCKHOLDERS’ EQUITY | |
Paid-in capital: | |
Common stock, $1 par, 1,250 shares authorized, | |
530 issued.......................................................... | $ 530 |
Paid-in capital in excess of par—common............ | 2,120 |
Total paid-in capital........................................... | 2,650 |
Retained earnings.......................................................... | 121,000 |
Total stockholders’ equity............................................. | $ 123,650 |
On April 30, 2012, the market price of Pondside’s common stock was $11 per share and the company distributed a 10% stock dividend.
Requirements
1. Journalize the distribution of the stock dividend.
2. Prepare the stockholders’ equity section of the balance sheet after the stock dividend.
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