Hernandez Company Has 560,000 Shares of $10 Par Value Common

question 26

Multiple Choice

Hernandez Company has 560,000 shares of $10 par value common stock outstanding. During the year, Hernandez declared a 10% stock dividend when the market price of the stock was $30 per share. Four months later Hernandez declared a $.50 per share cash dividend. As a result of the dividends declared during the year, retained earnings decreased by

• A) $1,988,000.
• B) $ 840,000.
• C) $ 308,000.
• D) $ 280,000.

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Definitions:

Optic Nerve

is the nerve that transmits visual information from the retina to the brain.

Müller-Lyer Illusion

An optical illusion where two lines of equal length appear to be of different lengths because of the presence of inward or outward facing arrowheads at their ends.

Apparent Distance Hypothesis

A theory explaining that emotions can alter the perceived distance of an object, with negative emotions making objects seem further away.

Cultural Bias Hypothesis

The theory suggesting that cognitive tests and other assessments may be biased towards the values and experiences of a specific cultural group.