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

question 68

Multiple Choice

If a firm has retained earnings of $20 million, a common shares account of $40 million, and additional paid-in-capital of $10 million, how much would be transferred in (or out) of these accounts in response to a 30 percent stock dividend, respectively?

• A) − 30 percent, 0 percent, + 30 percent
• B) − 30 percent, + 30 percent, 0 percent
• C) − 75 percent, + 30 percent, + 30 percent
• D) − 75 percent, + 37.5 percent, + 37.5 percent

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Definitions:

Pseudoscience

A collection of beliefs or practices mistakenly regarded as being based on scientific method but do not adhere to a valid scientific methodology.

Biological

Pertaining to the science of life or living matter in all its forms and phenomena, especially with reference to origin, growth, reproduction, structure, and behavior.

Chemistry

The science that examines the composition, structure, properties, and changes of matter, focusing on atoms and their interactions.

Scientific Methods

Systematic procedures for gathering knowledge and testing hypotheses in order to develop, refine, and validate scientific knowledge.