6 no journal entry is needed a memorandum entry should

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

Ask a homework question - tutors are online