Entries for Stock Dividends

Advanced Life Co. is an HMO for businesses in the Albuquerque area. The following account balances appear on the balance sheet of Advanced Life Co.: Common stock (410,000 shares authorized; 8,000 shares issued), $25 par, $200,000; Paid-in capital in excess of par common stock, $24,000; and Retained earnings, $2,000,000. The board of directors declared a 2% stock dividend when the market price of the stock was $34 a share. Advanced Life Co. reported no income or loss for the current year.

Question Content Area

a1. Journalize the entry to record the declaration of the dividend, capitalizing an amount equal to market value. If an amount box does not require an entry, leave it blank.

	CashPaid-In Capital in Excess of Par-Common StockRetained EarningsStock DividendsStock Dividends Distributable	- Select -	- Select -
	CashRetained EarningsStock DividendsStock Dividends DistributableTreasury Stock	- Select -	- Select -
	CashCommon StockPaid-In Capital in Excess of Par-Common StockRetained EarningsStock Dividends	- Select -	- Select -

Question Content Area

a2. Journalize the entry to record the issuance of the stock certificates. If an amount box does not require an entry, leave it blank.

	Common StockPaid-In Capital in Excess of Par-Common StockRetained EarningsStock DividendsStock Dividends Distributable	- Select -	- Select -
	Common StockPaid-In Capital in Excess of Par-Common StockRetained EarningsStock DividendsStock Dividends Distributable	- Select -	- Select -

Question Content Area

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.

Total paid-in capital	$fill in the blank 2fcf7d028028fae_1
Total retained earnings	$fill in the blank 2fcf7d028028fae_2
Total stockholders' equity	$fill in the blank 2fcf7d028028fae_3

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.

Total paid-in capital	$fill in the blank 2fcf7d028028fae_4
Total retained earnings	$fill in the blank 2fcf7d028028fae_5
Total stockholders' equity	$fill in the blank 2fcf7d028028fae_6