If a Firm Has Retained Earnings of $20 Million, a Common

question 56

Multiple Choice

If a firm has retained earnings of $20 million, a common shares account of $40 million, and additional paid-in-capital of $10 million, how much would be transferred in (or out) of these accounts in response to a 30 percent stock dividend, respectively?

• A) -30%, 0%, +30%
• B) -30%, +30%, 0%
• C) -75%, +30%, +30%
• D) -75%, +37.5%, +37.5%