Bruno's Has 6,000 Shares of Stock Outstanding with a Par

question 16

Multiple Choice

Bruno's has 6,000 shares of stock outstanding with a par value of $1.00 per share and a market value of $12 per share.The balance sheet shows $6,000 in the common stock account,$58,000 in the capital in excess of par account and $32,500 in the retained earnings account.The firm just announced a 50% (large) stock dividend.What is the value of the common stock account after the dividend?

• A)$7,000
• B)$8,500
• C)$9,000
• D)$10,500
• E)$14,000

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Definitions:

Capital Investment

Funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Mutual Agency

A principle in partnership where each partner has the authority to bind the partnership in contracts and agreements, affecting all partners.

Articles of Partnership

A document that formalizes an agreement between parties to enter into a business partnership, outlining the rights, responsibilities, and capital contributions of each partner.

Profit and Loss Ratio

Typically refers to the profit margin, which measures the efficiency of a company in generating profits from its operations, calculated as net income divided by revenue.