PE 13-4B Entries for stock dividends

Antique Buggy Corporation has 820,000 shares of $35 par common stock outstanding. On June 8, Antique Buggy Corporation declared a 5% stock dividend to be issued August 12 to stockholders of record on July 13. The market price of the stock was $63 per share on June 8.

Journalize the entries required on June 8, July 13, and August 12.


Answer:

June 8 Stock Dividends (820,000 shares × 5% × $63) 2,583,000
Stock Dividends Distributable (41,000 shares × $35) 1,435,000
Paid-In Capital in Excess of Par—
Common Stock [41,000 shares × ($63 – $35)] 1,148,000
July 13 No entry required.
Aug. 12 Stock Dividends Distributable 1,435,000
Common Stock 1,435,000