STOCK DIVIDENDS Cruz Company currently has 100,000 shares of $1 par common stock outstanding. On March 15,

Question:

STOCK DIVIDENDS Cruz Company currently has 100,000 shares of $1 par common stock outstanding. On March 15, a 10% stock dividend was declared to shareholders of record on April 2, distributable on April 14. Market value of the common stock was estimated at $6 per share.

1. Prepare journal entries for the declaration and distribution of the 10% common stock dividend.

2. Assume Cruz Company declared a stock dividend of 30% rather than 10%. Prepare journal entries for the declaration and distribution of the 30% common stock 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... Dividend
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...