Bruno's Has 7,000 Shares Outstanding with a Par Value of £1.00

question 24

Multiple Choice

Bruno's has 7,000 shares outstanding with a par value of £1.00 per share and a market value of £12 per share.The statement of financial position shows £7,000 in the ordinary equity account, £58,000
In the additional paid in capital account and £32,500 in the retained earnings account.The firm just
Announced a 50% (large) stock dividend.What is the value of the additional paid in capital account
After the dividend?

• A)£58,000
• B)£61,500
• C)£87,000
• D)£96,500
• E)£100,000

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Definitions:

Gross Profit

The difference between sales revenue and the cost of goods sold before deducting operating expenses, interest, and taxes.

Overall Profitability

An assessment of a company's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time.

Company

A legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

Perpetual Inventory System

An inventory accounting technique that instantly logs the sale or acquisition of inventory using computerized point-of-sale systems and enterprise asset management software.