Poco Travel Ltd. is authorized to issue 500,000 common shares. The company issued 70,000 shares at $7.50

Question:

Poco Travel Ltd. is authorized to issue 500,000 common shares. The company issued 70,000 shares at $7.50 per share. On June 10, 2017, when the Retained Earnings balance was $360,000, Poco Travel Ltd. declared a 10 percent stock dividend using the market value of $4.00 per share. It distributed the stock dividend on July 20, 2017. On August 5, 2017, Poco Travel Ltd. declared a $0.45 per share cash dividend, which it paid on September 15, 2017.

Required

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

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

3. Prepare the shareholders' equity section of the balance sheet after both dividends.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Distribution
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A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...