question archive Tucson Bancshares has 34,000 shares of $3 par common stock outstanding
Tucson Bancshares has 34,000 shares of $3 par common stock outstanding
Subject:AccountingPrice:2.89 Bought3
Tucson Bancshares has 34,000 shares of $3 par common stock
outstanding. Suppose Tucson declares and distributes an 8% stock dividend
when the market value of its stock is $20 per share.
1. Journalize Tucson’s declaration and distribution of the stock dividend on May 11. An explanation is not required.
2. What was the overall effect of the stock dividend on Tucson’s total assets? On total liabilities? On total stockholders’ equity?
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Req. 1
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Journal |
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DATE |
ACCOUNT TITLES AND EXPLANATION |
DEBIT |
CREDIT |
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May |
11 |
Retained Earnings (34,000 × .08× $20)...................................... |
54,400 |
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Common Stock (34,000 × .08× $3)........................................ |
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8,160 |
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Paid-in Capital in Excess of Par-Common.............................. |
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46,240 |
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Req. 2
No effect on total assets.
No effect on total liabilities.
No effect on total stockholders' equity.
