Dolanski Company Declares and Distributes a 30% Common Stock Dividend

question 128

Multiple Choice

Dolanski Company declares and distributes a 30% common stock dividend when it has 50,000 shares of $10 par common stock outstanding. The market price per share is $30 at the date of declaration. Which journal entry is prepared?

• A)debit Retained Earnings $450,000, credit Common Stock $150,000 and credit Paid-in Capital in Excess of Par-Common $300,000
• B)debit Retained Earnings $450,000, credit Paid-in Capital in Excess of Par-Common $500,000
• C)debit Retained Earnings $450,000 and credit Common Stock $450,000
• D)debit Retained Earnings $150,000 and credit Common Stock $150,000

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