Katie Company Had 40,000 Shares of $2 Par Value Common

question 3

Multiple Choice

Katie Company had 40,000 shares of $2 par value common stock outstanding prior to a 40% common stock dividend declaration and distribution. The market value of the common stock on the declaration date was $10. Which of the following statements incorrectly describes the effect of the common stock dividend and declaration?

• A) Retained earnings decreased $32,000.
• B) Capital in excess of par remained the same.
• C)Additional Paid in capital increased $128,000.
• D)Total stockholders' equity remained the same.

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Definitions:

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A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

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Drawing a conclusion about a certain characteristic of a population based on a sample from it.

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The provision of reasons or evidence to justify a claim or argument.