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lions [1.4K]
2 years ago
11

Mustang Corporation had 100,000 shares of $2 par value common stock outstanding. On December 31, 2015, the company's board of di

rectors declares a 20 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 distribution of the stock dividend by selecting the account names and dollar amounts from the drop-down menus.

Business
2 answers:
Nataly_w [17]2 years ago
8 0

Answer:

A stock dividend does not involve cash. By stock dividend even though the total stockholder equity remains the same, the stock dividend require to transfer the journal entry to transfer the amount from the retained earnings section of the balance sheet to the paid-up capital section of the balance sheet.

Explanation:

Please see attachment .

faust18 [17]2 years ago
3 0

Answer:

<u>The journal entry will be as follow:</u>

Dec 31th

Retained Earnings            200,000 debit

Stock Dividends Payable      200,000 credit

to record declared stock dividends

Jan 20th

Stock Dividends payable    200,000 debit

         Common Stock                                    40,000 credit

         Additional paid-in                               160,000 credit

Explanation:

The company will issue 20% stock

100,000 shares x 20% = 20,000 shares

The company cost for this 20,000 will be the market value

20,000 shares x $10 = 200,000

This will be compare with the face value of the shares to calculate the adidtional paid-in:

20,000 sahres x $2 face value = 40,000 common stock

200,000 market value - 40,000 face value = 160,000 additional paid-in

<u>The journal entry will be as follow:</u>

Dec 31th

We declare the dividends against retained earnings, from there we will take the funds to pay the dividends

Jan 20th

The dividends will be paid with common stock so we write-off the dividdends payable again the issued stock and their aditioanl paid-in.

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Answer:

The amount Lava should charge against income during year 4 is $63,000.

Explanation:

Since amortization is assumed to be recorded at the end of each year, this can be calculated as follows:

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Ann [662]

Answer:

a. $2,020 Favorable

Explanation:

The computation of spending variance for direct materials in April is shown below:-

For computing the spending variance for direct materials in April first we need to find out the actual price per unit which is here below:-

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3 years ago
Alice purchases a rental house on August 22, 2017, for a cost of $174,000. Of this amount, $100,000 is considered to be allocabl
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Answer:

correct option is c. $1,364

Explanation:

given data

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cost of the home = $100,000

cost of the land = $74,000

solution

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because home only residential real property

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maximum depreciation deduction allowed = 1364

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3 years ago
In year 1, the Consumer Price Index was 120 and the average nominal income was $30,000. In year 2, the Consumer Price Index was
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Answer:

Real income has increased by $720 in terms of dollar and 2% in percentage

Explanation:

<em>The real income is determined by adjusting the nominal income for inflation. The consumer price index (CPI) is used to measure the rate of inflation.</em>

R<em>eal income = Nominal income × CPI Base year/ CPI in current year</em>

Real Income =         32000 × 120/125

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Change Real income

Change in real income ($) = 30,720 - 30,000

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Change in real income (%)  =  (720/30,000) × 100

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Real income has increased by $720 in terms of dollar and 2% in percentage

                     

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