On May 1, 2014, Ziek Corp

question 34

Multiple Choice

On May 1, 2014, Ziek Corp. declared and issued a 10% common stock dividend. Prior to this dividend, Ziek had 200,000 shares of $1 par value common stock issued and outstanding. The fair value of Ziek 's common stock was $20 per share on May 1, 2014. As a result of this stock dividend, Ziek's total stockholders' equity

• A) increased by $400,000.
• B) decreased by $400,000.
• C) decreased by $20,000.
• D) did not change.

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Definitions:

Financial Cost

Expenses associated with borrowing funds or purchasing on credit, including interest expenses, fees, and other charges.

Balance

This term refers to the total amount of money in a financial account, the difference between credits and debits in an account, or the equilibrium between opposing forces or actions.

Construction Loan

A short-term loan used to finance the building of a home or another real estate project.

First Mortgage Bonds

Bonds that are secured by a first priority claim on a specific set of assets, usually property or real estate, in the event of the issuer's bankruptcy or default.