Question

Appaloosa Corporation had 100,000 shares of $2 par value common stock outstanding. On December 31, 2015, the company's board of directors declares a 50 percent stock dividend. This stock dividend will be distributed on January 20, 2016 to the stockholders of record on January 15, 2016. The market price of the company's stock is $10 per share on December 31, 2015. Complete the necessary journal entry to record the declaration by selecting the account names and dollar amounts from the drop-down menus.

Answer 1

Dec. 31

Dr Retained Earnings 100,000

Cr Common Stock Dividend Distributable 100,000

Step-by-step explanation:

Appaloosa Corporation Journal Entry

Dec. 31

Dr Retained Earnings 100,000

(50,000 shares x par value of $2 per share)

Cr Common Stock Dividend Distributable 100,000

(50,000 shares x par value of $2 per share)