Answer:
320,000 stocks with $10 par value
14% stock dividend (small stock dividend ≤ 20%)
so we will use the market price of the stocks = $17 x 320,000 x 14% = $761,600 total distribution
320,00 x 14% = 44,800 stocks x $10 par value = $448,000
the additional paid in capital = $761,600 - $448,000 = $313,600
December 1, declaration of stock dividend
Dr Retained earnings 761,600
Cr Common stock dividends distributable 448,000
Cr Additional paid in capital in excess of par value 313,600
December 31, distribution of stock dividends
Dr Common stock dividends distributable 448,000
Cr Common stock 448,000
