A Company Originally Issued 13,000 Shares of $6 Par Value

question 239

Multiple Choice

A company originally issued 13,000 shares of $6 par value common stock at $12 per share.The board of directors declares a 12% stock dividend when the market price of the stock is $22 a share.Which of the following is included in the entry to record the declaration of a stock dividend?

• A) Stock Dividends is debited for $34,320.
• B) Stock Dividends is credited for $34,320.
• C) Stock Dividends is debited for $18,720.
• D) Paid-In Capital in Excess of Par-Common is credited for $18,720.

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Definitions:

Capital Usage

Refers to how assets are employed within a firm to generate value, emphasizing the effective application of physical and financial capital.

Capital Inputs

The goods or services used to produce other goods or services, particularly those which are fixed like machinery or buildings versus labor.

Interest Rate

The cost of borrowing money, typically expressed as an annual percentage of the principal.

Renewal Price

Renewal price refers to the price at which a service, contract, or subscription can be renewed after the initial term ends.