On January 1, 2017, Garner Corp

question 62

Multiple Choice

On January 1, 2017, Garner Corp. had 10,000 shares of $1 par value common stock issued and outstanding. The stock was selling at $10 per share. During 2017, Garner declared and issued a 10% stock dividend. The stock dividend causes

• A)total shareholders' equity to increase by $1,000.
• B)net income to decrease by $1,000.
• C)earnings per share to decrease by $10,000.
• D)no change in total shareholders' equity

---

Definitions:

Actual Hours

The real number of hours worked, as opposed to planned or estimated hours.

Overhead Controllable Variance

The difference between the actual overhead incurred and the overhead that should have been incurred, based on controllable factors.

Budgeted Overhead

The estimated cost of all indirect production expenses for a specific period as part of the budgeting process.

Standard Hours Allowed

The amount of time that should be spent to produce a certain amount of goods or services, according to predetermined standards.