Dube Electric Recently Declared a 15 Percent Share Dividend

question 24

Multiple Choice

Dube Electric recently declared a 15 percent share dividend.On the date of the share dividend Dube had 16 million shares outstanding priced at R46 per share in the market.An accounting entry was required on the statement of financial position transferring some retained earnings to the ordinary equity account.If retained earnings was R280 million prior to the transaction, what was the rand amount of retained earnings after the transfer?

• A) R280.0 million
• B) R110.4 million
• C) R234.0 million
• D) R277.6 million
• E) R169.6 million

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Definitions:

Reciprocity Principle

A social norm suggesting that people should return the kind of behavior they receive from others, like kindness for kindness.

Bargaining

A negotiation process between two or more parties aimed at reaching a mutually acceptable agreement.

Obligation

A duty or commitment one is bound to by law, promise, or moral responsibility.

Social Loafing

A pattern in which people working together on a task generate less total effort than they would have if they had each worked alone.