ZIP Company Owns 40,000 Shares of the Common Stock of PIK

question 156

Essay

ZIP Company owns 40,000 shares of the common stock of PIK Company. ZIP decided to divest itself of this investment by distributing the PIK shares in the form of a property dividend. The dividend ratio is one share of PIK for every four shares of ZIP common held by shareholders. ZIP has 160,000 common shares outstanding. On April 15, 2018, the date of declaration, PIK stock had a par of $5 per share, a book value of $12 per share, and a fair value of $17 per share.
Required:
Prepare any necessary journal entries. The shares were distributed on May 15, 2018, to stockholders of record on May 1, 2018

---

Definitions:

Coping Strategies

Techniques or methods employed by individuals to manage stress, challenges, or adversity.

Intensive Study

A focused, in-depth investigation or analysis on a particular subject, field, or topic, often involving comprehensive and rigorous effort.

Masking Emotions

the act of concealing or altering one's true emotional state, often to adhere to social norms or personal goals.

Personality Development

Concerns the growth and evolution of an individual's character and psychological aspects over time, influenced by a combination of genetic, environmental, and social factors.