Q29E_1 Journalizing a stock dividend an... [FREE SOLUTION]

Chapter 13: Q29E_1 (page 715)

Journalizing a stock dividend and reporting stockholders鈥� equity
The stockholders鈥� equity of Lakeside Occupational Therapy, Inc. on December 31, 2017, follows:
Common Stock鈥擻(1 Par Value; 1,200 shares
authorized, 400 shares issued and outstanding
Paid-In Capital:
120,000
400
2,000
Retained Earnings
Total Stockholders鈥� Equity \) 122,000
Stockholders鈥� Equity
Paid-In Capital in Excess of Par鈥擟ommon 1,600
Total Paid-In Capital
$
On April 30, 2018, the market price of Lakeside鈥檚 common stock was $16 per share and the company declared a 13% stock dividend. The stock was distributed on May 15.
Requirements
1. Journalize the declaration and distribution of the stock dividend.

Expert verified

Stock dividend declared $832 out of which the Common stock dividend is $52 and paid-in excess of par is $780.

$\begin{array}{rcl} RetainedEarnings & = & NumberofShares 脳 StockDividend 脳 MarketPricePerShare \\ = & 400 脳 13 % 脳 $ 16 \\ = & $ 832 \end{array}$

$\begin{array}{rcl} CommonStock & = & NumberofShares 脳 StockDividend 脳 ParValuePerShare \\ = & 400 脳 13 % 脳 $ 1 \\ = & $ 52 \end{array}$

Date	Transaction	Debit	Credit
Apr 30, 2018	Retained Earnings	$832
	Common stock dividend		$52
	Paid-in capital in excess of par		$780
	To record dividend declared
May 15,2018	Common Stock dividend distribute	$52
	Common stock		$52
	To record dividend paid

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