Immediately Before a 15% Stock Dividend Was Declared and Distributed

question 79

Essay

Immediately before a 15% stock dividend was declared and distributed on 20,000 shares of par $8 stock, the market price of the Coolidge Corporation's stock was $18. Coolidge has total liabilities of $150,000 and total shareholders' equity of $450,000.
Required:
(1) Give the journal entry to record the declaration and distribution of the stock dividend.
(2) Calculate Coolidge's current ratio immediately after the stock dividend and comment.

---

Definitions:

Psychodynamic Theory

A theory in psychology that emphasizes systematic study of the psychological forces that underlie human behavior, feelings, and emotions and how they might relate to early experience.

Locus of Control

A psychological concept that refers to how strongly people believe they have control over the situations and experiences that affect their lives.

Reticular Activating System

A network of neurons located in the brainstem that plays a crucial role in controlling arousal and alertness.

Biological Explanations

Justifications of behavior or phenomena based on biological factors, such as genetics, brain structures, or biochemical imbalances.