Juan Inc Has 1,000 Common Shares Issued at $100 and Currently

question 135

Multiple Choice

Juan Inc. has 1,000 common shares issued at $100 and currently trading at $200. The entry to record declaration of a 10% stock dividend is

• A) debit Common Stock Dividends Distributable $100,000, credit Retained Earnings $100,000.
• B) debit Retained Earnings $100,000, credit Cash $100,000.
• C) debit Stock Dividends $20,000, credit Common Stock Dividends Distributable $20,000.
• D) debit Common Stock Dividends Distributable $20,000, credit Common Shares $20,000.

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Definitions:

Government Spending

Expenditures made by the government sector on goods and services, including infrastructure, public services, and transfer payments.

Aggregate Supply

The total supply of goods and services that firms in an economy plan to sell during a specific time period.

Expansionary Government Spending

Expansionary government spending involves increased public expenditures aimed at stimulating economic growth, typically during periods of economic downturn or recession.

Recessions

Phases of transitory economic regression that see a drop in business and industrial activities, typically identified by a GDP decrease across two back-to-back quarters.