Question

Company Z has 8 million shares of common stock authorized with a par value of $1 and a market price of $72. There are 4 million outstanding shares and 1 million shares held in treasury stock.

Required:

Part a. Prepare the journal entry if the company declares and distributes a 10% stock dividend.

Part b. Show the effect of the 10% stock dividend on assets, liabilities, and stockholders' equity.

Part c. Prepare the journal entry if the company declares and distributes a 100% stock dividend.

Part d. Show the effect of the 100% stock dividend on assets, liabilities, and stockholders equity.

Answer

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