A Company Originally Issued 10,000 Shares of $5 Par Value

question 9

Multiple Choice

A company originally issued 10,000 shares of $5 par value common stock at $7 per share. The board of directors declares a 10% stock dividend when the market price of the stock is $8 a share. Which of the following is included in the entry to record the declaration of a stock dividend?

• A)Retained Earnings is debited for $8,000.
• B)Retained Earnings is credited for $8,000.
• C)Retained Earnings is debited for $7,000.
• D)Paid-in Capital in Excess of Par-Common is credited for $7,000.

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Sequential Method

A procedure in cost accounting for allocating service department costs to producing departments in a specific order.

Direct Method

Definition: A cash flow statement preparation approach that presents major classes of gross cash receipts and payments.

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A mathematical phrase that can contain ordinary numbers, variables (like x or y), and operators (like add, subtract, multiply, and divide).

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A division within a business that is responsible for maintaining the cleanliness of the premises.