On October 15,2016,a 5% Stock Dividend Was Declared and Distributed

question 54

Essay

On October 15,2016,a 5% stock dividend was declared and distributed.The market value of the common stock on this date was $32 per share.Fractional share rights represented 100,000 shares.Cash was paid in lieu of issuing fractional share rights.On the date of declaration and payment,the company had 10 million shares of common stock outstanding.The par value of the common shares was $5.
Required:
Prepare any necessary journal entries to record the above events.

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Definitions:

Chi-squared Test

A statistical test used to determine if there is a significant difference between observed frequencies and expected frequencies in categorical datasets.

Chi-squared Distribution

A statistical distribution that is used primarily in hypothesis testing and is derived from the sum of squared standard normal deviates.

Proportion

A statistical measure that indicates the fraction of the total number of items in a certain category or characteristic.

Two-tail Test

A statistical test that is used to determine if there is a significant difference between a sample and a particular population mean, where the critical region is split between both tails of the distribution.