Chapter 13, Problem P13.42APGA

To determine

Stock Dividend:

The Stock dividend is the number of shares given as dividend to the shareholders. The Stock dividend is declared first and shares are issued later. There are two journal entries made, one at the time of declaration of stock dividend and another at the time of issuance of shares.

Cash dividend:

The Cash dividend is the amount of dividend paid to shareholders in cash. The Cash dividend is declared first and paid later. There are two journal entries made, one at the time of declaration of dividend and another at the time of payment.

Stock split:

Stock split refers to the dividing one share into two of more shares. It is usually done to make the share available for small investor with smaller value. A stock split does not affect the total stockholder’s equity and it also does not require any journal entry.

Stockholder’s Equity:

Stockholders Equity includes the paid up amount of all stocks (Common as well as preferred) issued and retained earnings balance. It represents the amount owed to the stockholders by the company. Stockholders Equity is the section of balance sheet’s equity part.

Treasury stock:

Treasury stock is the shares bought back by the company itself. A company may purchase its own shares and the shares bought back are called treasury stock.

1. Journal entries:

To Indicate:

The journal entries for the given transactions

To determine

2. Stockholders Equity Section of the balance sheet:

To indicate: The Stockholders Equity Section of the balance sheet as on December 31, 2018