If a Firm Has Retained Earnings of $20 Million, a Common

question 66

Multiple Choice

If a firm has retained earnings of $20 million, a common shares account of $25 million, and additional paid-in-capital of $15 million, how much would be transferred in (or out) of these accounts in response to a 15 percent stock dividend, respectively?

• A) − 15 percent, 0 percent, + 15 percent
• B) − 15 percent, + 15 percent, 0 percent
• C) − 30 percent, + 15 percent, + 15 percent
• D) − 30 percent, + 30 percent, + 30 percent

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Definitions:

Psychological Contract

An unwritten agreement that reflects the mutual beliefs, perceptions, and informal obligations between an employer and an employee.

Inducements

Incentives or rewards offered to motivate specific actions or behaviors.

Fringe Benefits

Are additional non-wage or non-salary forms of remuneration.

Quality of Work Life

The degree to which individuals are healthy, satisfied, and productive in their work, which reflects on their overall well-being.