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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Definitions:

Budget Constraint

The limits imposed on household choices by income, wealth, and product prices, affecting the combination of goods and services they can afford.

Point D

A reference to a specific point on a graph or chart, often used to denote a particular set of conditions or coordinates in economic analysis.

Available Option

Choices or alternatives that are accessible and can be chosen in a decision-making process.

Price

Price refers to the amount of money expected, required, or given in payment for something.