On October 1, 2016, White Company Declared a Property Dividend

question 110

Multiple Choice

On October 1, 2016, White Company declared a property dividend payable in the form of marketable equity securities classified as "available for sale" for financial accounting purposes. The marketable equity securities will be distributed to the common stockholders on December 1, 2016. The investment in equity securities originally cost White $510,000 on August 1, 2016. The investment's fair value on various dates is as follows:
The amount credited to Gain on Disposal of Investments resulting from this dividend transaction should be

• A) $0.
• B) $20,000.
• C) $25,000.
• D) $30,000.

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Definitions:

Profit of Shareholders

The portion of a company's profits that is allocated to stockholders, often seen as a primary goal of businesses to maximize shareholder value.

Shareholder Orientation

A business approach that prioritizes the interests and value maximization for shareholders, often guiding strategic and operational decisions.

Welfare of Society

The overall health, happiness, and well-being of a community or civilization, often considered in economic and social policies.

Collusion

An agreement between parties, often secretly, to limit open competition by deceiving or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair market advantage.