Immediately before a 15% stock dividend was declared and distributed on 20,000 shares of par $8 stock, the market price of the Coolidge Corporation's stock was $18. Coolidge has total liabilities of $150,000 and total shareholders' equity of $450,000.
Required:
(1) Give the journal entry to record the declaration and distribution of the stock dividend.
(2) Calculate Coolidge's current ratio immediately after the stock dividend and comment.

Question

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The Answer of Immediately before a 15% stock dividend was declared and distributed on 20,000 shares of par $8 stock, the market price of the Coolidge Corporation's stock was $18. Coolidge has total liabilities of $150,000 and total shareholders' equity of $450,000.
Required:
(1) Give the journal entry to record the declaration and distribution of the stock dividend.
(2) Calculate Coolidge's current ratio immediately after the stock dividend and comment.

Immediately Before a 15% Stock Dividend Was Declared and Distributed