On january 1, 2017, frontier corporation had $1,125,000 of common stock outstanding that was issued at par. it also had retained earnings of $750,000. the company issued 40,500 shares of common stock at par on july 1 and earned net income of $395,000 for the year.

journalize the declaration of a 15% stock dividend on december 10, 2017, for the following independent assumptions.

(a) par value is $10, and market price is $18.
(b) par value is $5, and market price is $20.

a) See explanation

b) See explanation

Explanation:

Requirement A

Dec 31, 2017   Debit  Stock dividends                               $413,100

                       Credit    Common Stock Dividends Distributable    $229,500

                       Credit    Paid-in-capital in excess of par value         $183,600

Note: January 1, 2017 - Number of common stock outstanding = =

Number of common stock outstanding = 112,500 shares

July 1, 2017 - share issuance                   = 40,500 shares

Total number of shares                           = 153,000 shares

Total number of Stock dividend (Declared on Dec. 10) = 153,000 x 15% = 22,950 shares

Stock dividend = number of stock dividend x market price per share

Stock dividend = 22,950 shares x $18 = $413,100

Common Stock Dividends Distributable = number of stock dividend x par value = 22,950 shares x $10 = $229,500

Paid-in-capital in excess of par value = number of stock dividend x (Market price - par value) = 22,950 shares x $(18 - 10) = $183,600

Requirement B

Dec 31, 2017   Debit  Stock dividends                               $796,500

                       Credit    Common Stock Dividends Distributable     $199,125

                       Credit    Paid-in-capital in excess of par value         $597,375

Note: January 1, 2017 - Number of common stock outstanding = =

Number of common stock outstanding = 225,000 shares

July 1, 2017 - share issuance                   =   40,500 shares

Total number of shares                           = 265,500 shares

Total number of Stock dividend (Declared on Dec. 10) = 265,500 x 15% = 39,825 shares

Stock dividend = number of stock dividend x market price per share

Stock dividend = 39,825 shares x $20 = $796,500

Common Stock Dividends Distributable = number of stock dividend x par value = 39,825 shares x $5 = $199,125

Paid-in-capital in excess of par value = number of stock dividend x (Market price - par value) = 39,825 shares x $(20 - 5) = $597,375

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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