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    Corporation's board of directors declare stocks dividend

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    On August 26, 20x8 a corporation's board of directors declared a 2% stock dividend applicable to outstanding shares of it $5 par value common stock, of which 150,000 are authorized, 130,000 are issued and 10,000 are held in treasury. The stock dividend was distributable on September 25 to stockholders of record on September 10.

    On August 25, the market value of the common stock was $12 per share. On November 26, the board of directors declared a $0.20 per share cash dividend. No other stock transaction have occurred.

    In Microsoft Excel format, please record the transactions on August 26, September 10, September 25, and November 26. Please make the December 31 entry to close Dividends and Stock Dividends to Retained Earnings.

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    Solution Preview

    See the attached file for clarity.

    General Journal
    Date Description Debit Credit
    26/08 Stock dividends:
    130,000 - ...

    Solution Summary

    The solution provides detailed calculations and explanations for the problem.

    $2.19