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

question 41

Multiple Choice

A corporation declared and issued a 15% stock dividend on October 1. The following information was available immediately prior to the dividend: $\begin{array}{lrr}\text { Retained earnings } & \$ 750,000 \\\text { Shares issued and outstanding } & 60,000 \\\text { Market value per share } & \$ 15 \\\text { Par value per share } & \$ 5\end{array}$

The amount that contributed capital will increase (decrease) as a result of recording this stock dividend is:

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

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