A Corporation Declared and Issued a 15% Stock Dividend on October

question 222

Multiple Choice

A corporation declared and issued a 15% stock dividend on October 1.The following information was available immediately prior to the dividend: The amount that contributed capital will increase (decrease) as a result of recording this stock dividend is:

• A)$45,000.
• B)$135,000.
• C)$(45,000).
• D)$(135,000).
• E)$0.

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Definitions:

Investors

Individuals or organizations that allocate capital with the expectation of receiving financial returns.

Financing Activities

Transactions and events that affect the long-term liabilities and equity of a company, such as issuing debt or stock.

Creditors

Individuals, businesses, or financial institutions that are owed money by debtors or customers.

Owner's Equity

Represents an owner's total investment in a company after subtracting liabilities from assets; it signifies the net value an owner has in the business.