Question

Alpha company has 100.000 authorized shares of $5 par common stock issued 50,000 shares
at $6. Subsequently, the company declared a 20. stock dividend on a date when the market
price was $11 a share. What are the number of stocks issued in stock dividend?​

Answer 1

Answer:

Debit Credit

Jan 21 Retained earnings ($100,000 x 2% dividend) 2,000

Dividends payable 2,000

Declared 2% cash dividend to payable Mar 1 to shareholders of record Feb 5.

Mar 1 Dividends payable 2,000

Cash 2,000

Paid the dividend declared on January 21.

Answer 2

Explanation:

100000 authorities share .

50000 share issues

now remaining share is( 100000-50000) =50000

50000 × 2% = 1000 stock

50000 share and 1000 stock dividend they issued