Koffler Corp. reported the following shareholders' equity:
Share capital:
Preferred shares, 30,000 shares authorized,
Common shares, 200,000 shares authorized,
Required:
a. The board of directors declared a 10% common stock dividend when the market price of the shares was $7 per share. Prepare the necessary journal entries to record the declaration and distribution of the common shares dividend.
b. What effect did the distribution of the common shares dividend have on:
c. Assuming all required preferred shares dividends have been paid, calculate the book value of a share of common shares before and after the common shares dividend. If Smith Jones owned 100 shares of Koffler's common shares before the stock dividend, what is the total book value of Smith's shares before and after the stock dividend?

Question

Koffler Corp. reported the following shareholders' equity:
Share capital:
Preferred shares, 30,000 shares authorized,
  Common shares, 200,000 shares authorized,
  Required:
a. The board of directors declared a 10% common stock dividend when the market price of the shares was $7 per share. Prepare the necessary journal entries to record the declaration and distribution of the common shares dividend.
b. What effect did the distribution of the common shares dividend have on:
  c. Assuming all required preferred shares dividends have been paid, calculate the book value of a share of common shares before and after the common shares dividend. If Smith Jones owned 100 shares of Koffler's common shares before the stock dividend, what is the total book value of Smith's shares before and after the stock dividend?

Quizplus · Accepted Answer

The Answer of Koffler Corp. reported the following shareholders' equity:
Share capital:
Preferred shares, 30,000 shares authorized,
  Common shares, 200,000 shares authorized,
  Required:
a. The board of directors declared a 10% common stock dividend when the market price of the shares was $7 per share. Prepare the necessary journal entries to record the declaration and distribution of the common shares dividend.
b. What effect did the distribution of the common shares dividend have on:
  c. Assuming all required preferred shares dividends have been paid, calculate the book value of a share of common shares before and after the common shares dividend. If Smith Jones owned 100 shares of Koffler's common shares before the stock dividend, what is the total book value of Smith's shares before and after the stock dividend?

Koffler Corp. Reported the Following Shareholders' Equity