XY Company Had the Following Shareholder Equity: Common Shares Outstanding,10,000;

question 127

Multiple Choice

XY Company had the following shareholder equity: Common shares outstanding,10,000; average issue price,$115; current market price,$140.Shares sold on a stock subscription basis are not issued until the subscription price is collected in full.Recording a declaration of a 10 percent stock dividend in conformity with generally accepted accounting principles would change retained earnings:

• A) On the basis of the market value of shares.
• B) By 10 percent of its balance before the dividend.
• C) On the basis of an arbitrary value of shares.
• D) On the basis of the average paid-in value of shares.

---

Definitions:

Personal Friends

Individuals with whom one has a close, voluntary, mutual, and personal relationship outside of familial or professional contexts.

Close Relatives

Individuals who are directly related to someone through blood ties or through legal means, such as adoption.

Microstructures

The patterns of relatively intimate social relations formed during face-to-face interaction. Families, friendship circles, and work associations are all examples of microstructures.

Protestant Ethic

Protestant Ethic is a concept in sociology that correlates Protestantism with the rise of capitalism, emphasizing hard work, frugality, and diligence as a means to success.