Healthy Life Co is an HMO for businesses in the Fresno area The following account balances appear on Healthy Lifes balance sheet Common stock (1,000,000 shares authorized 500,000 shares issued), $4 par, $2,000,000 Paid in capital in excess of parcommon stock, $900,000 and Retained earnings, $33,875,000 The board of directors declared a 3 stock dividend when the market price of the stock was $14 a share Healthy Life reported no income or loss for the current year CHART OF ACCOUNTS Healthy Life Co General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated Depreciation Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 236 Stock Dividends Distributable 311 Common Stock 312 Paid In Capital in Excess of Par Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid In Capital in Excess of Par Preferred Stock 331 Paid In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 515 Credit Card Expense 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Selling Expenses 534 Rent Expense 535 Insurance Expense 536 Office Supplies Expense 537 Organizational Expenses 562 Depreciation Expense Equipment 590 Miscellaneous Expense 710 Interest Expense a Journalize the entries to record (1) the declaration of the dividend on December 1, capitalizing an amount equal to market value, and (2) the issuance of the stock certificates on December 31 Refer to the Chart of Accounts for exact wording of account titles JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST REF DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 5 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 Total retained earnings 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 Total paid in capital Total retained earnings Total stockholders' equity

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Healthy Life Co. is an HMO for businesses in the Fresno area. The following account balances appear on Healthy Lifes balance sheet: Common stock (1,000,000

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 (1,000,000 shares authorized; 500,000 shares issued), $4 par, $2,000,000; Paid-in capital in excess of par—common stock, $900,000; and Retained earnings, $33,875,000. The board of directors declared a 3% stock dividend when the market price of the stock was $14 a share. Healthy Life reported no income or loss for the current year.

CHART OF ACCOUNTS

Healthy Life Co.

General Ledger

	ASSETS
110	Cash
120	Accounts Receivable
131	Notes Receivable
132	Interest Receivable
141	Inventory
145	Office Supplies
151	Prepaid Insurance
181	Land
193	Equipment
194	Accumulated Depreciation-Equipment

	LIABILITIES
210	Accounts Payable
221	Notes Payable
226	Interest Payable
231	Cash Dividends Payable
241	Salaries Payable
261	Mortgage Note Payable

	EQUITY
236	Stock Dividends Distributable
311	Common Stock
312	Paid-In Capital in Excess of Par-Common Stock
315	Treasury Stock
321	Preferred Stock
322	Paid-In Capital in Excess of Par-Preferred Stock
331	Paid-In Capital from Sale of Treasury Stock
340	Retained Earnings
351	Cash Dividends
352	Stock Dividends

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
515	Credit Card Expense
520	Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Selling Expenses
534	Rent Expense
535	Insurance Expense
536	Office Supplies Expense
537	Organizational Expenses
562	Depreciation Expense-Equipment
590	Miscellaneous Expense
710	Interest Expense

a. Journalize the entries to record (1) the declaration of the dividend on December 1, capitalizing an amount equal to market value, and (2) the issuance of the stock certificates on December 31. Refer to the Chart of Accounts for exact wording of account titles.

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5

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
Total retained earnings
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.