On May 1, 2017, When the Market Value of Jay

question 70

Multiple Choice

On May 1, 2017, when the market value of Jay Ltd.'s common shares was $15 per share, the corporation had 100,000 no par value common shares issued and outstanding.On this day, Jay declared and issued a 15% common stock dividend.As a result of this stock dividend, Jay's total shareholders' equity

• A)increased by $225,000.
• B)decreased by $225,000.
• C)decreased by $15,000.
• D)did not change.

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Definitions:

Reported Earnings

This refers to the net income that a company officially reports in its financial statements for a specific period, reflecting the firm's financial performance.

Cumulative Preferred Stock

A type of preferred share that has the feature where omitted or unpaid dividends are accumulated and must be paid out before dividends can be issued on the company's common shares.

Common Shareholders

Individuals or entities that own common shares in a corporation, granting them rights to dividends and corporate decisions.

Paid-In Capital

The total amount of cash and other assets paid into the company by investors in exchange for shares of stock.