eastline corporation had 11,500 shares of $5 par value common stock outstanding when the board of directors declared a stock dividend of 3,795 shares. at the time of the stock dividend, the market value per share was $15. the entry to record this dividend is:

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akankshasharma92 akankshasharma92 · Answer 1 · 2022-12-02T07:26:49+01:00

The entry to record this dividend is Debit Retained Earnings $18,975; credit Common Stock Dividend Distributable $18,975 (3,795 × 5).

Retained earnings (RE) are the remaining net income that belongs to the company after dividends have been distributed to shareholders.
Company management is typically in charge of deciding whether to keep the profits or distribute them to the shareholders.
A company with a growth strategy may choose to use retained earnings to fund expansion activities rather than paying any dividends at all or paying very little.
Companies may decide to use their retained earnings for a variety of purposes, including expanding their manufacturing capabilities, hiring more salespeople, introducing new products, or share repurchases.
Because they reflect the net income that a company has saved over time, retained earnings are a crucial factor in determining the financial health of a company.

Learn more about Retained earnings (RE), here

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