Concept #1: Stock Dividends

Practice: You own 200 shares of the 100,000 outstanding shares of Big Company. Big Company declared a stock dividend of 5% when the market price per share was $55. Which of the following is true?

Additional Problems
The corporation issued a small stock dividend of 15 percent of its 120,000 outstanding shares of common stock. You own 1,000 shares of the common stock, prior to the stock dividend. As a result of the stock dividend: A) you have 150 more additional shares of common stock. B) your total stockholders' equity increased. C) the company’s total stockholders' equity increased. D) you had a monetary gain equal to the 150 shares multiplied times the market price.
Which of the following events will cause The Hatching Jacket Co.’s total stockholders’ equity to decrease? a. Declaration of a 10% stock dividend b. Declaration and payment of a $1.25 a share cash dividend c. Issuance of no-par value common stock for $40,000 d. Declaration and distribution of a 3-for-1 stock split
G Company had 50,000 shares of $20 par value common stock outstanding on July 1. Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27. The entry to record this dividend is: a. Debit Retained Earnings $135,000; credit Common Stock Dividend Distributable $135,000. b. Debit Retained Earnings $135,000; credit Cash $135,000. c. Debit Retained Earnings $100,000; credit Common Stock Dividend Distributable $100,000. d. Debit Retained Earnings $135,000; credit Common Stock Dividend Distributable $100,000; credit Paid-In Capital in Excess of Par Value, Common Stock $35,000.
A stock dividend is recorded with a transfer from: a) Retained earnings to contributed capital. b) Retained earnings to assets. c) Contributed capital to retained earnings. d) Assets to contributed capital.