The Shareholders' Equity Section of Manning Company as of December

question 84

Essay

The shareholders' equity section of Manning Company as of December 31, 2010 follows:
The company declares a 12 percent stock dividend on the outstanding shares. The market price of the stock is $90. The journal entry to record the stock dividend would include:
a. a credit to Additional Paid-In Capital, Common Stock for $100,800.
b. a debit to Common Stock for $7,200.
c. a credit to Stock Dividend for $108,000.
d. a debit to Additional Paid-In Capital, Common Stock for $108,000.

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Definitions:

Assumption of Risk

A legal principle under which an individual acknowledges and accepts the risks associated with an activity, possibly diminishing their right to claim damages.

Equestrian

related to horse riding or the skills associated with riding, training, and handling horses.

Comparative Negligence

A principle of law that allocates damages based on the degree of fault of each party involved in an accident.

Good Samaritan Statute

A statute that exempts from liability a person, such as a physician passerby, who voluntarily renders aid to an injured person but negligently, but not unreasonably negligently, causes injury while rendering the aid.