58) Risingstar Corporation currently has 129,000 shares outstanding of $3 par value common stock. The
stock was originally issued for $14 per share. On March 15, the board of directors declares a 13% stock
dividend when the stock is selling for $22 per share. Which of the following is the correct journal entry to
record this transaction? (Do not round intermediate calculations.)
A) debit Common Stock Dividend Distributable $50,310, debit Paid-In Capital in Excess of Par—Common
for $318,630 and credit Retained Earnings $368,940
B) debit Stock Dividends $368,940 and credit Common Stock Dividend Distributable $368,940
C) debit Stock Dividends $368,940, credit Common Stock Dividend Distributable $50,310 and credit Paid–
In Capital in Excess of Par—Common $318,630
D) debit Paid-In Capital in Excess of Par—Common $368,940 and credit Retained Earnings $368,940
59) Fallingstar, Inc. has 110,000 shares of common stock issued and outstanding, with a par value of $0.03
per share. It declared a 17% common stock dividend; market value is $14 per share. Which of the
following is the correct journal entry to record the transaction? (Round your answers to the nearest whole
dollar.)
A) debit Stock Dividends $261,800 and credit Paid-In Capital in Excess of Par—Common $261,800
B) debit Stock Dividends $261,800, credit Common Stock Dividend Distributable $561, and credit Paid-In
Capital in Excess of Par—Common $261,239
C) debit Stock Dividends $261,800 and credit Cash $261,800
D) debit Common Stock Dividend Distributable $561, debit Paid-In Capital in Excess of Par—Common
$261,239, and credit Retained Earnings $261,800
60) On December 1, 2019, Murphy, Inc. had 35,000 shares of $7 par value common stock issued and
outstanding. The next day it declared a 50% stock dividend. The market value of the stock on that date
was $15 per share. Which of the following is the correct journal entry to record this transaction?
A) debit Stock Dividends $525,000 and credit Cash $525,000
B) debit Stock Dividends $525,000, credit Common Stock $245,000, and credit Paid-In Capital in Excess of
Par $280,000
C) debit Common Stock $122,500 and credit Cash $122,500
D) debit Stock Dividends $122,500 and credit Common Stock Dividend Distributable $122,500
61) On June 30, 2018, Ginger, Inc. showed the following data on the equity section of their balance sheet:
Stockholders’ Equity
Common Stock, $1 par; 202,000 shares authorized,
150,000 shares issued and outstanding
$150,000
Paid-In Capital in Excess of Par—Common
$260,000
Retained Earnings
946,000
Total Stockholders’ Equity
$1,356,000
On July 1, 2018, the company declared and distributed a 9% stock dividend. The market value of the
stock at that time was $20 per share. Following this transaction, what is the balance of Common Stock?
A) $163,500
B) $57,180
C) $285,540
D) $357,180
62) On June 30, 2018, Padres, Inc. showed the following data on the equity section of their balance sheet:
Stockholders’ Equity
Common Stock, $1 par; 197,000 shares authorized,
146,000 shares issued and outstanding
$146,000
Paid-In Capital in Excess of Par—Common
$263,000
Retained Earnings
958,000
Total Stockholders’ Equity
$1,367,000
On July 1, 2018, the company declared and distributed a 10% stock dividend. The market value of the
stock at that time was $15 per share. Following this transaction, what is the number of shares issued?
A) 86,500
B) 297,300
C) 160,600
D) 146,000
63) On June 30, 2018, Chris Brothers, Inc. showed the following data on the equity section of their balance
sheet:
Stockholders’ Equity
Common Stock, $1 par; 197,000 shares authorized,
146,000 shares issued and outstanding
$146,000
Paid-In Capital in Excess of Par—Common
$271,000
Retained Earnings
941,000
Total Stockholders’ Equity
$1,358,000
On July 1, 2018, the company declared and distributed a 8% stock dividend. The market value of the
stock at that time was $17 per share. Following this transaction, what is the balance of Paid-In Capital in
Excess of Par—Common?
A) $227,640
B) $523,160
C) $271,000
D) $457,880
64) On June 30, 2018, Samuel, Inc. showed the following data on the equity section of their balance sheet:
Stockholders’ equity
Common stock, $1 par; 199,000 shares authorized,
157,000 shares issued and outstanding
$157,000
Paid-In Capital in Excess of Par—Common
$262,000
Retained Earnings
957,000
Total Stockholders’ Equity
$1,376,000
On July 1, 2018, the company declared and distributed a 6% stock dividend. The market value of the
stock at that time was $14 per share. Following this transaction, what is total stockholders’ equity?
A) $1,376,000
B) $1,558,140
C) $1,302,860
D) $1,208,840
65) On June 30, 2018, Dakota, Inc. showed the following data on the equity section of their balance sheet:
Stockholders’ Equity
Common Stock, $1 par; 195,000 shares authorized,
149,000 shares issued and outstanding
$149,000
Paid-In Capital in Excess of Par—Common
$260,000
Retained Earnings
949,000
Total Stockholders’ Equity
$1,358,000
On July 1, 2018, the company declared and distributed a 11% stock dividend. The market value of the
stock at that time was $20 per share. As a result of this stock dividend, what is the balance of Retained
Earnings?
A) $770,580
B) $951,000
C) $981,780
D) $621,200
66) Nice International originally issued 105,000 shares of common stock at a price of $22 per share. A year
later, it distributed a 12% stock dividend to shareholders. At the time of the stock dividend, the share
price had increased to $27 per share. Which of the following statements is true?
A) Nice will record sales revenues of $277,200.
B) Nice will record a loss of $63,000.
C) Nice will record a gain of $63,000.
D) Nice will record neither a gain nor a loss.
67) Mission Corporation reported the following equity section on its current balance sheet. The common
stock is currently selling for $18.00 per share.
Common Stock, $5 par, 194,000 shares authorized, 143,000 shares issued
and outstanding
$715,000
Paid-In Capital in Excess of Par—Common
130,000
Retained Earnings
301,000
Total Stockholders’ Equity
$1,146,000
After the declaration and distribution of a 12% stock dividend, what is the total number of common
shares issued?
A) 13,000
B) 160,160
C) 143,000
D) 17,160
68) Which of the following requires a formal journal entry?
A) selection of a new CEO
B) stock dividend distribution
C) stock split
D) date of record for cash dividends
69) Maybridge, Inc. has 3000 shares of common stock outstanding. A stockholder has 300 shares. If the
company distributes a 25% stock dividend, the stockholder now holds ________ shares of Maybridge
stock.
A) 375
B) 750
C) 300
D) 75
70) Charger Corporation currently has 120,000 shares outstanding of $1 par value common stock. The
stock was originally issued for $12 per share. On March 15, the board of directors declares and distributes
a 10% stock dividend when the stock is selling for $16 per share. Prepare the journal entry to record the
stock dividend. Omit explanation.
71) On December 1, 2018, Garland, Inc. had 200,000 shares of $1 par value common stock issued and
outstanding. The next day, Garland declared and distributed a 50% stock dividend. The market value of
the stock on December 2, 2018 was $9 per share. Prepare the journal entry for the transaction. Omit
explanation.
72) Sherry, Inc. had 140,000 shares of $5 par value common stock issued and outstanding as of December
15, 2018. The company is authorized to issue 1,000,000 common shares. On December 15, 2018, Sherry
declared a 40% stock dividend when the market value for its common stock was $9 per share. The stock
was issued on Dec. 30.
Prepare the journal entries to record the declaration and distribution of the stock dividend. Explanations
are not required. Compute the total shares after the dividend.
73) Charter Schools, Inc. is authorized to issue 500,000 shares of $2 par common stock. The company
issued 106,000 shares at $6 per share. When the market price of common stock was $10 per share, Charter
declared and distributed a 10% stock dividend. Later, Charter declared and paid a $0.10 per share cash
dividend.
Prepare the journal entries to record these transactions. Explanations are not required.
74) A stock split decreases par value per share, whereas stock dividends do not affect par value per share.
75) A stock split can involve issuing more shares of stock than authorized in the corporate charter.
76) A 3-for-1 stock split of a $3 par value share will result in three shares of $1 par value being issued for
each share of $3 par value stock.
77) A memorandum entry is an entry in the journal that notes a significant event but has no debit or
credit amount.
78) Which of the following is a reason for a company to announce a stock split?
A) to reward investors
B) to increase total stockholders’ equity
C) to decrease the market price at which the stock is trading
D) to provide the shareholders with something of value, when the company cannot afford a cash
dividend
79) Which of the following occurs when the board of directors declares a 3-for-1 stock split on 20,000
outstanding shares of $25 par common stock?
A) The par value of the stock remains the same.
B) The par value of the stock increases to $50 per share.
C) The number of outstanding shares remains at 20,000.
D) The number of outstanding shares increases to 60,000.
80) Element Corporation reported the following equity section on its current balance sheet. The common
stock is currently selling for $20.25 per share.
Common Stock, $5 par, 337,000 shares authorized, 157,000 shares issued
and outstanding
$785,000
Paid-In Capital in Excess of Par—Common
140,000
Retained Earnings
301,000
Total Stockholders’ Equity
$1,226,000
After a 2-for-1 stock split, what is the number of issued shares?
A) 280,000
B) 314,000
C) 297,000
D) 140,000
81) Ballpark has 61,000 shares of $16.00 par common stock outstanding. Ballpark announces a stock split
of 4-for-1. What is the effect of the split?
A) par stays at $16.00; total shares increase to 15,250
B) par drops to $8.00; total shares stay at 61,000
C) par drops to $4.00; total shares increase to 244,000
D) par goes to $64.00; total shares increase to 244,000