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Problem
Ruby Red Corp. stockholder's equity section of the balance sheet looks like this on July 30:
Stockholder's Equity:
Common Stock, $4 par, 200,000 shares authorized, 75,000 shares issued and outstanding
300,000
Paid in Capital in excess of Par Value, Common Stock
700,000
Total Paid in Capital
1,000,000
Retained Earnings
585,000
Total Stockholder's Equity
1,585,000
a) Prepare the journal entry to record a 8% stock dividend declared and distributed on July 31 when the market rate was $15 per share.
b) Post the entries to the T-accounts provided.
c) Show how the stockholder's equity section of the balance sheet will look after this transaction.
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