Williamson Company Declared and Distributed a 10% Stock Dividend When

question 144

Multiple Choice

Williamson Company declared and distributed a 10% stock dividend when it had 200,000 shares of $1 par value common stock outstanding. The market price per share of common stock was $60 per share when the dividend was declared. The journal entry to record the stock dividend would include a credit to:

• A)Retained Earnings $200,000.
• B)Paid-in Capital in Excess of Par-Common $1,180,000.
• C)Common Stock $200,000.
• D)Retained Earnings $20,000.

---

Definitions:

Assets

Economic resources controlled by a business from which future economic benefits are expected to flow to the business.

Liabilities

These are obligations a business owes to external parties, including loans, accounts payable, mortgages, and other debts.

Insurance Policy

A contract between an individual or entity and an insurance company, detailing the terms for payment of premiums and the provisions of coverage.

Adjusting Entries

Journal entries made at the end of an accounting period to update certain accounts and ensure they reflect the true financial position of a company.