Asked by
Paneri kansara
on Dec 16, 2024
Verified
On January 1 Sly Corporation had 120000 shares of $10 par value common stock outstanding. On March 17 the company declared a 15% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to record the transaction of March 17 would include a
A) credit to Stock Dividends for $54000.
B) credit to Cash for $234000.
C) credit to Common Stock Dividends Distributable for $180000.
D) debit to Common Stock Dividends Distributable for $180000.
Stock Dividend
A distribution of additional shares of a company to its shareholders instead of paying cash dividends, often used to conserve cash while still rewarding investors.
Par Value
The nominal or face value of a bond, stock, or coupon as stated by the issuer, which often bears no relation to its market value.
Common Stock Dividends Distributable
A liability account that represents dividends declared by a company but not yet distributed to shareholders.
- Identify and record various types of stock dividends and their impact on financial statements.
Verified Answer
CV
Learning Objectives
- Identify and record various types of stock dividends and their impact on financial statements.