Inland Machine Tool, Inc., is authorized to issue 700,000 shares of $5 par common stock . The

Question:

Inland Machine Tool, Inc., is authorized to issue 700,000 shares of $5 par common stock. The company issued 71,000 shares at $5 per share, and all 71,000 shares are outstanding. When the market price of common stock was $9 per share, Inland Machine Tool, Inc., declared and distributed a 15% stock dividend. Later, Inland Machine Tool, Inc., declared and paid a $0.40 per share cash dividend.

Requirements

1. Journalize the declaration and distribution of the stock dividend.

2. Journalize the declaration and the payment of the cash dividend.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...