The stockholders equity of TVX Company at the beginning of the day on February 5 follows:

Common stock$25 par value, 150,000 shares authorized, 57,000 shares issued and outstanding	$	1,425,000
Paid-in capital in excess of par value, common stock		525,000
Retained earnings		675,000
Total stockholders equity	$	2,625,000

On February 5, the directors declare a 16% stock dividend distributable on February 28 to the February 15 stockholders of record. The stocks market value is $41 per share on February 5 before the stock dividend. The stocks market value is $35 per share on February 28.

Exercise 11-6 Part 1

1. Prepare entries to record both the dividend declaration and its distribution.

Journal entry worksheet

• Record the declaration of 16% stock dividend.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Feb 05

Date	General Journal	Debit	Credit
Feb 28

Exercise 11-6 Part 2

2. One stockholder owned 900 shares on February 5 before the dividend. Compute the book value per share and total book value of this stockholders shares immediately before and after the stock dividend of February 5.

	Before	After
Book value per share
Total book value of shares

Exercise 11-6 Part 3

3. Compute the total market value of the investors shares in part 2 as of February 5 and February 28.

	February 5	February 28
Total market value of shares

Selected account balances from the adjusted trial balance for Olinda Corporation as of its calendar year-end December 31, 2017, follow.

		Debit			Credit
a.	Interest revenue				$	15,500
b.	Depreciation expenseEquipment.	$	35,500
c.	Loss on sale of equipment		27,350
d.	Accounts payable					45,500
e.	Other operating expenses		107,900
f.	Accumulated depreciationEquipment					73,100
g.	Gain from settlement of lawsuit					45,500
h.	Accumulated depreciationBuildings					177,500
i.	Loss from operating a discontinued segment (pretax)		19,750
j.	Gain on insurance recovery of tornado damage					30,620
k.	Net sales					1,013,500
l.	Depreciation expenseBuildings		53,500
m.	Correction of overstatement of prior years sales (pretax)		17,500
n.	Gain on sale of discontinued segments assets (pretax)					41,500
o.	Loss from settlement of lawsuit		25,250
p.	Income taxes expense		?
q.	Cost of goods sold		497,500

Problem 13-6 Part 2

2a. What is the amount of income from continuing operations before income taxes? 2b. What is the amount of the income taxes expense?

2c. What is the amount of income from continuing operations?

What is the amount of income from continuing operations before income taxes?

Income from continuing operations before taxes	$0

What is the amount of the income taxes expense?

Income taxes expense	$9,825

What is the amount of income from continuing operations?

Income from continuing operations after taxes	$327,500