A Firm Has Retained Earnings of $6 Million, a Common

question 19

Multiple Choice

A firm has retained earnings of $6 million, a common shares account of $3 million, and additional paid-in-capital of $6 million, and the firm just paid a 10 percent stock dividend. Assume that fair market value is reflected in the relative size of both the common shares account and the additional paid-in-capital account. What are the new levels in each account?

• A) Retained earnings = $900,000; Common shares = $300,000; Additional paid-in-capital = $600,000
• B) Retained earnings = $5,100,000; Common shares = $2,700,000; Additional paid-in-capital = $5,400,000
• C) Retained earnings = $5,100,000; Common shares = $3,300,000; Additional paid-in-capital = $6,600,000
• D) Retained earnings = $5,900,000; Common shares = $2,700,000; Additional paid-in-capital = $5,400,000

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The complete set of genes or genetic material present in a cell or organism.

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The smallest unit of a chemical compound that can exist; composed of two or more atoms bonded together.

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Deoxyribonucleic acid, a molecule that carries genetic instructions used in growth, development, functioning, and reproduction of all known living organisms and many viruses.