The Board of Directors of Capstone Inc $\begin{array}{|l|l|l|}\hline \text { Retained earnings } & 9,000 & \\\hline \text { Dividends payable } & & 9,000 \\\hline\end{array}$

question 148

Multiple Choice

The board of directors of Capstone Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On the date of declaration, there were 50,000 shares authorized, 20,000 shares issued, and 5,000 shares held as treasury stock. What is the entry for the dividend declaration?

• A) \(\begin{array}{|l|l|l|}
• \hline \text { Retained earnings } & 9,000 & \\
• \hline \text { Dividends payable } & & 9,000 \\
• \hline
• \end{array}\)
• B) \(\begin{array}{|l|l|l|}
• \hline \text { Retained earnings } & 9,000 & \\
• \hline \text { Cash } & & 9,000 \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|l|l|}
• \hline \text { Retained earnings } & 10,000 & \\
• \hline \text { Dividends payable } & & 10,000 \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|l|l|}
• \hline \text { Retained earnings } & 10,000 & \\
• \hline \text { Cash } & & 10,000 \\
• \hline
• \end{array}\)

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Definitions:

Subsidizing

The act of providing financial support, typically by the government, to reduce the cost of producing goods or services, making them more affordable to the public.

Economically Inefficient

refers to a scenario where resources are not optimally utilized, leading to waste or missed opportunities for better outcomes.

Rent Seeking

The practice of increasing one's share of existing wealth without creating new wealth, often through manipulating the political environment.

Public Policy

Involves strategies and actions taken by the government to address issues within society, aiming to improve the public welfare.