Gilbert Corporation Issued a 40-Percent Stock Dividend of Its Common

question 47

Multiple Choice

Gilbert Corporation issued a 40-percent stock dividend of its common stock that had a par value of $10 before and after the dividend. At what amount should retained earnings be capitalized for the additional shares issued?

• A) There should be no capitalization of retained earnings
• B) Par value
• C) Market value on the declaration date
• D) Market value on the payment date

---

Definitions:

First Amendment

An amendment to the United States Constitution that guarantees freedoms concerning religion, expression, assembly, and the right to petition.

Preliminary Hearing

A pretrial proceeding where a judge determines whether there is enough evidence to require a trial on the charges against a defendant.

Beyond A Reasonable Doubt

The standard of evidence required to convict a person in a criminal trial, indicating that there is no logical explanation other than the defendant's guilt.

Fifth Amendment

an amendment to the U.S. Constitution that provides several protections to individuals, including the right against self-incrimination and double jeopardy.