Prepare the appropriate journal entries

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Problem - Entries for Stock Dividends and Stock Splits

The stockholders' equity accounts of Lawrence Company have the following balances on December 31, 2010.

Common stock, $10 par, 236,000 shares issued and outstanding

$2,360,000

Paid-in capital in excess of par

    1,200,000

Retained earnings

    5,600,000

Shares of Lawrence Company stock are currently selling on the Midwest Stock Exchange at $41.

Prepare the appropriate journal entries for each of the following. (a) and (b) and provide answer for (c).

(a) A stock dividend of 5% is declared and issued.

(b) A stock dividend of 100% is declared and issued.

(c) How much of a reduction in retained earnings results when a 2-for-1 stock split is declared and issued?

 

Reference no: EM131773415

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