On October 15, 2009, a 5% Stock Dividend Was Declared

question 81

Essay

On October 15, 2009, 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:

Normal Distribution

A symmetric probability distribution centered around the mean, indicating that events close to the mean occur more often than those at a distance.

α

Denotes the level of significance in hypothesis testing, representing the probability of rejecting the null hypothesis when it is actually true.

Z Statistic

A type of standard score that indicates the number of standard deviations a datum is from the mean of a distribution, used in significance testing.

One-tailed Test

A statistical hypothesis test in which the region of rejection is on only one side of the sampling distribution.