Answer:
. $378,000
Explanation:
For every 10 shares of Gibbs, the stockholres receive 1 share of Oliver
There are 180,000 shares of Gibbs outstanding, so it will give as property dividends:
180,000 / 10 = 18,000 Oliver Shares
Each share has a market cost for 21 so, the dividends declared have a value of:
18,000 x 21 = 378,000
<u>This will be recorded as follow:</u>
<u>when the dividends are declared:</u>
Retained Earnings 378,000 debit
Property Dividends Payable 378,000 debit
<u>And when the stock delivered:</u>
Property Dividends Payable 378,000 debit
Oliver Investment 378,000 credit