Textbook Problem

Stock Dividend The shareholders’ equity of Raven Company is as shown:

Raven is considering the declaration and issuance of a stock dividend at a time when the market price is $30 per share.

Required:

1. 1. Assuming the board of directors recommends a 6% stock dividend, prepare:
   1. a. the journal entry at the date of declaration
   2. b. the journal entry at the date of issuance
   3. c. shareholders’ equity after the issuance
2. 2. Assuming, instead, that a 40% stock dividend is recommended, answer a, b, and c of Requirement 1.