During December 2019, BRC Declared and Issued a 1 for 5

question 171

Essay

During December 2019, BRC declared and issued a 1 for 5 stock dividend on its 100,000 outstanding common shares.The per share amounts were: original average issue price $16; current market price (end 2019)$13; and the average market price for 1999, $15.Give the required journal entry to record the simultaneous declaration and issuance of the stock dividend.

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Definitions:

Retail Method

An accounting method to estimate inventory value by applying a consistent markup to the cost of merchandise, used often in the retail industry.

Estimated Cost

An approximation of the cost for goods, services, or construction projects, based on experience, forecasting, and/or information about similar transactions.

Inventory

Assets held for sale in the ordinary course of business, or in the process of production for such sale, or in the form of materials or supplies to be consumed in the production process or in the rendering of services.

March 31

The end of the financial year for many businesses and organizations, notable for accounting and tax purposes.