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On January 1, BearBack Corporation had 300,000 common shares issued.On April 10, the company declared a 10% stock dividend to be distributed on April 30.The market value of the shares was $7 on April 10 and $10 on April 30.
-The entry to record the transaction of April 10 would include a
A)credit to Retained Earnings for $30,000.
B)credit to Cash for $210,000.
C)credit to Stock Dividends Distributable for $210,000.
D)debit to Stock Dividends Distributable for $300,000.

Question

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On January 1, BearBack Corporation had 300,000 common shares issued.On April 10, the company declared a 10% stock dividend to be distributed on April 30.The market value of the shares was $7 on April 10 and $10 on April 30.
-The entry to record the transaction of April 10 would include a
A)credit to Retained Earnings for $30,000.
B)credit to Cash for $210,000.
C)credit to Stock Dividends Distributable for $210,000.
D)debit to Stock Dividends Distributable for $300,000.

Quizplus · Accepted Answer

The entry to record the transaction of April 10 would include a credit to Stock Dividends Distributable for $210,000. This is because a 10% stock dividend on 300,000 shares results in 30,000 additional shares being issued. The value of these shares is based on the market value on the date of declaration (April 10), which is $7 per share. Therefore, 30,000 shares x $7 = $210,000. This amount is credited to Stock Dividends Distributable, reflecting the company's obligation to distribute the stock dividend.

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