6 no journal entry is needed a memorandum entry should

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Unformatted text preview: 45,000 (100,000) 1,540,000 If Stevenson Enterprises declares a 2­for­1 stock split, no journal entry is necessary. Stockholders’ equity: Common stock ($3 par value, 1,300,000 shares authorized, 140,000 shares issued, 120,000 shares outstanding, and 20,000 shares held as treasury stock) Additional paid­in capital (C/S) Retained earnings Treasury stock Total stockholders' equity c. $ $ $ 456,000 639,000 545,000 (100,000) 1,540,000 Stevenson Enterprises does not need to prepare any journal entry for the stock split. If Stevenson Enterprises subsequently declares and pays a 10% stock dividend, the company would have to make the following entry. Stock Dividend (–SE) 150,000a Common Stock (+SE) 36,000b Additional Paid­In Capital, Common Stock (+SE) 114,000 Declared and issued 10% stock dividend. a $150,000 b $36,000 = [(60,000 shares initially outstanding + 60,000 shares issued in stock split) 10%] $12.50 per share = 12,000 new shares issued $3 par value per share P12–7 Concluded Stockholders’ equity: Common stock ($3 par value, 1,300,000 shares...
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