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

question 68

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 percent, 0 percent, + 30 percent
• B) − 30 percent, + 30 percent, 0 percent
• C) − 75 percent, + 30 percent, + 30 percent
• D) − 75 percent, + 37.5 percent, + 37.5 percent

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Definitions:

Plasma Membrane

The lipid bilayer that surrounds a cell, regulating the passage of substances in and out of the cell.

Muscle Fiber

A single muscle cell, typically long and cylindrical, which contracts to produce movement.

ATP

Adenosine triphosphate, a molecule that carries energy within cells, used as a direct source of energy for many cellular processes.

ADP

Adenosine diphosphate, a molecule involved in ATP synthesis, it releases energy when it is converted to ATP in cellular respiration.