Rick Co Had 30 Million Shares of $1 Par Common Stock

question 18

Multiple Choice

Rick Co. had 30 million shares of $1 par common stock outstanding at January 1, 2018. In October 2018, Rick Co.'s Board of Directors declared and distributed a 1% common stock dividend when the market value of its common stock was $60 per share. In recording this transaction, Rick would:

• A) Debit retained earnings for $18 million.
• B) Credit paid-in capital-excess of par for $18 million.
• C) Credit common stock for $18 million.
• D) None of these answer choices are correct

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