Question

Question 6

1. Table 10-5
   Ronald Cummings purchased 800 shares of Barnum Corp.'s common stock for $15 per share. Barnum Corp.'s shares have a par value of $2.
   
   
   Referring to Table 10-5, if Barnum Corp. declared and issued a two-for-one stock split, and later declared and paid on the same day a cash dividend of $1.00 per share, what journal entry would Ronald Cummings make in order to record the cash dividend from Barnum Corp.?

   		Investment in the A1 Resort 1,600 Gain from Stock Split 1,600
   		Investment in the A1 Resort 3,200 Cash 800 Gain from Stock Split 3,200 Dividend Income 800
   		Cash 1,600 Dividend Income 1,600
   		Cash 1,600 Dividend Income 800 Gain from Stock Split 800
   		Cash 800 Dividend Income 800

Answer 1

Shares held by Ronald Cummings after two-for-one stock split = 800*2 = 1600

Dividends received = 1600*1 = $1600

Cash	1,600
Dividend Income		1,600
Option C is correct