Ducheyne Electric Recently Declared a 15 Percent Stock Dividend

question 34

Multiple Choice

Ducheyne Electric recently declared a 15 percent stock dividend.On the date of the stock dividend Ducheyne had 16 million shares outstanding priced at $46 per share in the market.An accounting entry was required on the balance sheet transferring some retained earnings to the common stock account.If retained earnings was $280 million prior to the transaction,what was the dollar amount of retained earnings after the transfer?

• A) $280.0 million
• B) $110.4 million
• C) $234.0 million
• D) $277.6 million
• E) $169.6 million

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Definitions:

Goods-In

Refers to incoming goods; a term used in inventory management to describe goods that have been received but not yet processed.

Bailment

The legal relationship arising when physical possession, but not ownership, of personal property is transferred from one person to another under agreement.

Storage

The action or method of storing goods or information for future use.

Simple Delivery Contract

An agreement where the seller is obligated to transfer possession of a specified good or item to the buyer upon receipt of payment.