Zeman, Inc

question 31

Multiple Choice

Zeman, Inc. declares and distributes a 10% common stock dividend when it has 20,000 shares of $20 par value common stock outstanding. If the market value of the common stock is $30, the journal entry to record the stock dividend would include a:

• A)credit to Common Stock $100,000.
• B)credit to Common Stock $20,000.
• C)credit to Paid-in Capital in Excess of Par-Common $20,000.
• D)credit to Paid-in Capital in Excess of Par-Common $40,000.

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Definitions:

Edgeworth Box

A diagram used in microeconomics to show the distribution of resources and the optimality of trade-offs between two agents in an economy.

Pareto Efficient

A condition where resources are distributed in such a manner that improving the situation of one person necessitates the detriment of another.

Initial Endowment

Refers to the initial amount of money, assets, or resources that an individual, firm, or country possesses before entering into any trading or production activities.

Pareto Optimal

An arrangement of resource distribution that prevents the improvement of one individual's condition without adversely affecting another individual.