Question

Swifty Corporation has 46,500 shares of $13 par value common stock outstanding. It declares a 15% stock dividend on December 1 when the market price per share is $18. The dividend shares are issued on December 31. Prepare the entries for the declaration and issuance of the stock dividend. (

Answer 1

Common stock dividend distributable = Par * Number of shares * % dividend

= 13 * 46,500 * 15%

= $90,675

Stock Dividend = Number of shares * market price * % dividend

= 46,500 * 18 * 15%

= $125,550

Date Account Title Debit Credit

Dec, 1 Stock Dividend $125,550

Common Stock Dividend Distributable $90,675

Paid in Capital in excess of Par- $34,875

Common stock

Date Account Title Debit Credit

Dec, 31 Common Stock Dividend Distributable $90,675

Common Stock $90,675