Question

More Info The stockholders' equity of Shoreside Occupational Therapy, Inc. on December 31, 2017, follows: B (Click the icon to view the data.) i (Click the icon to show additional information.) Read the requirements. On April 30, 2018, the market price of Shoreside's common stock was $13 per share and the company declared an 11% stock dividend. The stock was distributed on May 15. Issued 11% stock dividend. Requirement 2. Prepare the stockholders' equity section of the balance sheet as of May 31, 2017. Assume R change made to Retained Earnings before preparing the balance sheet was closing the Stock Dividends accou Data Table Shoreside Occupational Therapy, Inc. Balance Sheet (Partial) May 31, 2018 Stockholders' Equity Stockholders' Equity Paid-In Capital: Paid-In Capital: Common Stock-$1 Par Value; 1,300 shares authorized, $ Common Stock-$1 Par Value; 1,300 shares authorized, 500 shares issued and outstanding Paid-In Capital in Excess of Par—Common Total Paid-In Capital 500 2,000 2,500 123,000 Retained Earnings Paid-In Capital in Excess of Par—Common Total Paid-In Capital Retained Earnings $ 125,500 Total Stockholders' Equity Total Stockholders' Equity Print Done

Answer 1

1) Total stock dividend = No. of shares outstanding*Stock dividend %*Market price

= 500 shares*11%*$13 per share = $715

Par value of common stock in stock dividend = (500 shares*11%)*$1 par = $55

Paid in capital in excess of par = 55 shares*($13-$1) = $660

Journal Entries (Amounts in $)

Date	Accounts and Explanation	Debit	Credit
Apr. 30	Stock Dividends	715
	Common Stock Dividend Distributable (55*$1)		55
	Paid-In Capital in Excess of Par-Common Stock (715-55)		660
	(To record the stock dividend declared)
May 15	Common Stock Dividend Distributable	55
	Cash		55
	(To record the issue of stock dividend)

2) Shares outstanding after issue of stock dividend = 500 shares+55 shares = 555 shares

The stockholders equity section is shown as follows:- (Amounts in $)

Shoreside Occupational Therapy, Inc.
Balance Sheet (Partial)
May 31, 2018
Stockholder's Equity
Paid-In Capital:
Common Stock-$1 Par Value; 1,300 shares authorized, 555 shares issued and outstanding (555*$1)	555
Paid-In Capital In Excess of Par-Common (2,000+660)	2,660
Total Paid-In Capital	3,215
Retained Earnings (123,000-715 stock dividends)	122,285
Total Stockholder's Equity	125,500

Stock dividend will be deducted from retained earnings.