A Corporation Declared and Issued a 15% Stock Dividend on October

question 85

Multiple Choice

A corporation declared and issued a 15% stock dividend on October 1. The following information was available immediately prior to the dividend: $\begin{array} { l } \text {Retained earnings }&\$750,000 \\ \text { Shares issued and outstanding}&60,000 \\ \text {Market value per share }&\$15 \\ \text { Par value per share}& \$5\\\end{array}$
The amount that contributed capital will increase (decrease) as a result of recording this stock dividend is:

• A)$(135,000).
• B)$135,000.
• C)$(45,000).
• D)$45,000.
• E)$0.

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Definitions:

Office Supplies

Items used in offices for daily operations, such as stationery, paper, and computer supplies.

Accounts Payable

Accounts payable are liabilities of a company that represent its obligations to pay off short-term debts to its creditors or suppliers.

Normal Debit Balance

Refers to the side (debit or credit) on which an account will typically report a balance, with assets and expenses usually having a normal debit balance.

Recorded By Credits

Transactions that increase liabilities, equity, or revenue, or decrease assets or expenses, reflected in the accounting records.