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Question
The following account balances appeared on the balance sheet of Osgood Industries at the beginning of the period:
| Common Stock (300,000 shares authorized, $100 par) | $10,000,000 |
| Paid-In Capital in Excess of Par—Common Stock | 2,000,000 |
| Retained Earnings | 45,000,000 |
During the period, the board of directors declared a 2% stock dividend when the market price of the stock was $135 per share.
| a. | Journalize the entries for the following: | |
| (1) | Declaration of the dividend, capitalizing an amount equal to market value | |
| (2) | Issuance of the stock certificates | |
| b. | Determine the following amounts before the stock dividend was declared: | |
| (1) | Total paid-in capital | |
| (2) | Total retained earnings | |
| (3) | Total stockholders’ equity | |
| c. | Determine the following amounts after the stock dividend was declared and closing entries were made at the end of the year: | |
| (1) | Total paid-in capital | |
| (2) | Total retained earnings | |
| (3) | Total stockholders’ equity | |
Answer
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