Centurion Alarms Recently Declared a 10 Percent Stock Dividend Centurion's Stock Currently Sells for $4 Per Share

question 24

Multiple Choice

Centurion Alarms recently declared a 10 percent stock dividend. Prior to the stock dividend, the equity section on Centurion's balance sheet was:


$\begin{array}{lr}\text { Common stock ( } 100,000 \text { shares outstanding, \$1 par value) } & \$ 100,000 \\\text { Additional paid-in capital } & 60,000 \\\text { Retained earnings } & \underline{90,000} \\\text { Total common shareholders' equity } & \underline{\$ 250,000}\end{array}$


Centurion's stock currently sells for $4 per share. After the stock dividend is paid, the amount in the Common stock account should be _______ and the amount in the Retained earnings account should be ______. 

• A)$110,000; $50,000
• B)$100,000; $90,000
• C)$140,000; $50,000
• D)$100,000; $50,000
• E) $90,000; $110,000

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