Question

Pro-Builders Corporation has 213,500 shares of $30 par common stock outstanding. On September 2, Pro-Builders Corporation declared a 1% stock dividend to be issued November 30 to stockholders of record on October 3. The market price of the stock was $49 per share on September 2. Journalize the entries required on September 2, October 3, and November 30. If no entry is required, simply skip to the next transaction. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Answer:

retained earnings   104,615 debit

        dividends payable      104,615 credit

--to record sotck dividends declared--

dividends payable        104,615 debit

     common stock                  64,050 credit

     additional paid-in capital  40,565 credit

--to record issuance of stock dividends--

Explanation:

213,500 shares x 1% = 2,135 new shares

par value:      2,135 x $30  =     64,050

market value 2,135 x $49  =    104,615

additional paid-in (difference) 40,565