On January 1, Hamblin Corporation had 90,000 shares of $10 par value common stock outstanding. On March 17 the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was $13 on March 17. The entry to record the transaction of March 17 would include a
A) credit to Stock Dividends for $27,000.
B) credit to Cash for $117,000.
C) credit to Common Stock Dividends Distributable for $90,000.
D) debit to Common Stock Dividends Distributable for $90,000.

Question

Quizplus · Accepted Answer

The entry to record the stock dividend would include a credit to Common Stock Dividends Distributable for the par value of the additional shares to be issued. The 10% stock dividend on 90,000 shares results in 9,000 additional shares (90,000 * 10%). At $10 par value, this amounts to $90,000.

On January 1, Hamblin Corporation Had 90,000 Shares of $10