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VikaD [51]
3 years ago
7

On October 1, Oriole Corporation’s stockholders’ equity is as follows.

Business
1 answer:
svetlana [45]3 years ago
3 0

Answer:

a. Compute the par value per share (1) before the stock dividend and (2) after the stock dividend.

  • 1) $7 per stock
  • 2) $7 per stock

b. Indicate the balances in the three stockholders? equity accounts after the stock dividend shares have been distributed.

  • Common stock $589,050
  • Paid-in capital in excess of par - common stock $83,550
  • Retained earnings $625,400

Explanation:

since it is a "small" stock dividend, it will be carried out at market value and not at par value.

the total number of stocks = $535,500 / $7 par value = 76,500 stocks

total transaction = 76,500 stocks x $14 x 10% = $107,100

the journal entry should be:

Dr Retained earnings 107,000

    Cr Common stock 53,550

    Cr Paid in capital in excess of par value 53,550

total common stock account = $535,500 + $53,550 = $589,050 / 84,150 stocks = $7 per stock

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Find out more about monetary police here:

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