Entries for stock dividends Obj. 3 Healthy Life Co. is an HMO for businesses in the Fresno
Question:
Entries for stock dividends Obj. 3 Healthy Life Co. is an HMO for businesses in the Fresno area. The following account balances appear on Healthy Life’s balance sheet: Common stock (3,000,000 shares authorized; 2,200,000 shares issued),
$15 par, $33,000,000; Paid-in capital in excess of par—common stock, $9,000,000; and Retained earnings,
$89,550,000. The board of directors declared a 5% stock dividend when the market price of the stock was $18 a share. Healthy Life reported no income or loss for the current year.
a. Journalize the entries to record (1) the declaration of the dividend, capitalizing an amount equal to market value, and (2) the issuance of the stock certificates.
b. Determine the following amounts before the stock dividend was declared: (1) total paid-in capital, (2) total retained earnings, and (3) total stockholders’ equity.
c. Determine the following amounts after the stock dividend was declared and closing entries were recorded at the end of the year: (1) total paid-in capital, (2) total retained earnings, and
(3) total stockholders’ equity.
AppendixLO1
Step by Step Answer:
Corporate Financial Accounting
ISBN: 9781337398176
15th Edition
Authors: Carl Warren, Jefferson Jones