Dora Company Declared and Distributed a 10% Stock Dividend on 20,000

question 28

Multiple Choice

Dora Company declared and distributed a 10% stock dividend on 20,000 shares of issued and outstanding $5 par value common stock. The market price per share was $9 on the declaration date and was $10 on the distribution date. Which of the following correctly describes the accounting for the declaration and distribution of the stock dividend?

• A) Retained earnings decreased $20,000.
• B) Capital in excess of par increased $10,000.
• C)Common stock increased $18,000.
• D)Retained earnings decreased $18,000.

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Definitions:

Abstract-Reasoning Skills

The skill to examine data, identify trends and links, and address issues at a sophisticated, conceptual stage.

Social-Cultural Perspective

An approach in psychology that examines how social, cultural, and environmental variables influence individuals' behavior and thought processes.

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Belonging to a social group and identifying as a member of it, which can influence one's behavior, attitudes, and perceptions of others.

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