Journalizing a stock dividend and reporting stockholders’ equity The stockholders’ equity of Pondside Occupational Therapy, Inc., on December 31,2011, follows:
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STOCKHOLDERS’ EQUITY |
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Paid in capital: |
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Common stock, $1 par, 1,250 shares authorized, |
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530 issued |
$ 530 |
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Paid–in capital in excess of par—common |
2,120 |
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Total paid in capital |
2,650 |
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Retained earnings |
121,000 |
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Total stockholders’ equity |
$ 123,650 |
On April 30, 2012, the market price of Pondside’s common stock was $11 per share and the company distributed a 10% stock dividend.
Requirements
1. Journalize the distribution of the stock dividend.
2. Prepare the stockholders’ equity section of the balance sheet after the stock dividend.