9.Cornerstone Exercise 10-32 (Algorithmic)

Stock Dividend

Boyer Corporation reported the following information: common shares, no par value; unlimited shares authorized; 77,000 shares issued and outstanding.

Required:

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1. What is the appropriate journal entry to record a 10% stock dividend if the market price of the common shares is $30 per share when the dividend is declared and paid? For a compound transaction, for those boxes in which no entry is required, leave the box blank

Accounts PayableCommon SharesContributed Surplus - Common sharesPreferred SharesRetained Earnings - Select -

Accounts PayableCommon SharesContributed Surplus - Common sharesPreferred SharesRetained Earnings - Select -

(Record small stock dividend)

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2. What is the appropriate journal entry to record a 30% stock dividend if the market price of the common shares is $30 per share when the dividend is declared but decreases to $21 per share when the stock dividend is announced?

Accounts PayableCommon SharesContributed Surplus - Common sharesPreferred SharesRetained Earnings - Select -

Accounts PayableCommon SharesContributed Surplus - Common sharesPreferred SharesRetained Earnings - Select -

(Record large stock dividend)

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3. How do these transactions affect Boyer's total shareholders' equity?

Total shareholders' equity is increaseddecreasedunaffected

increaseddecreasedunaffected

by these transactions.