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Inc declares a 15% common stock dividend when it has 30,000 shares of $10 par value common stock outstanding
Inc declares a 15% common stock dividend when it has 30,000 shares of $10 par value common stock outstanding. If the market value of $24 per share is used, the amounts debited to Stock Dividends and credited to Paid-in Capital in Excess of Par are: ol 3.0 antion Select one: Stock Dividends $108,000: Paid-in Capital in Excess of Par $45,000 Stock Dividends $108,000 Paid-in Capital in Excess of Par $63,000 Stock Dividends $45,000 Paid-in Capital in Excess of Par $63,000 Stock Dividends $45,000 Paid-in Capital in Excess of Par 50
Expert Solution
Answer:
Number of Shares = 30,000
Common Stock dividend declared = 15%
It is Stated in the question that market value of $24 per share must be used for the purpose of declaration of dividend.
Calculation of Common Stock dividend
Common Stock Dividend = Number of shares × Market value × Dividend Rate
Common Stock Dividend = 30,000 × $24 × 15%
Commom Stock Dividend = $108,000
Calculation of paid in excess of par
Common Stock Dividend Paid excess per share = (Market Value - Par value)× Dividend Rate
Common Stock Dividend Paid in excess per share = $24 - $10 ×15%
Common Stock Dividend Paid in excess per share = $2.1
Total Stock Dividend Paid in excess= 30,000×$2.1
Total Stock Dividend Paid in excess = $63,000
Amount Debited to Stock Dividend $108,000 and Credited to Paid in Capital in excess of Par are $63,000
| Stock Dividends $108,000 ; Paid in Capital in excess of Par. $63,000 |
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