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A Company Issues a 4 % Stock Dividend When the Price

question 83

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A company issues a 4 % stock dividend when the price of the stock was $6 per share.The company has 20 million common shares outstanding prior to the stock dividend.How would the company account for this stock dividend?


Definitions:

Appraised Fair Value

The estimated market value of an asset as determined by a formal assessment or valuation process.

Cost

The amount of money or resources expended to acquire an asset, produce a product, or deliver a service.

Book Value

The amount of an asset or liability according to its balance sheet account, minus any depreciation, amortization, or impairment costs.

Inventory Items

Goods and materials that a business holds for the ultimate goal of resale or production.

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