ABC Declared a Property Dividend $\begin{array}{|l|l|l|}\hline \text { Retained earnings } & 70,000 & \\\hline \text { Property dividends payable } & & 70,000 \\\hline\end{array}$

question 55

Multiple Choice

ABC declared a property dividend. The dividend consisted of 10,000 common shares of its investment in XYZ Company. The shares had originally been purchased at $4 per share and had a $1 par. The value of the shares on the declaration date is $7 per share. What is the first entry that should be recorded related to this dividend?

• A) \(\begin{array}{|l|l|l|}
• \hline \text { Retained earnings } & 70,000 & \\
• \hline \text { Property dividends payable } & & 70,000 \\
• \hline
• \end{array}\)
• B) \(\begin{array}{|l|l|l|}
• \hline \text { Retained earnings } & 70,000 & \\
• \hline \text { Property dividends payable } & & 40,000 \\
• \hline \text { Gain } & & 30,000 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|l|l|}
• \hline \text { Investment in XYZ } & 30,000 & \\
• \hline \text { Retained earnings } & & 30,000 \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|l|l|}
• \hline \text { Investment in XYZ } & 30,000 & \\
• \hline \text { Gain on investment } & & 30,000 \\
• \hline
• \end{array}\)

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Definitions:

Binomial Theorem

The binomial theorem describes the algebraic expansion of powers of a binomial, showing how to expand expressions that involve addition or subtraction within a power.

Expression

A mathematical phrase that can contain numbers, variables, and operation symbols.

\(5a\)

An algebraic expression representing five times the variable "a".

\(4b\)

Mathematical notation representing four times the variable b.