Table 14-2
Following Is the Shareholders' Equity Section of the Balance

question 199

Multiple Choice

Table 14-2
Following is the shareholders' equity section of the balance sheet of Thomson Corporation:
$$\begin{array} { | l | r | } \hline \text { Contributed capital } & \\\hline \text { Preferred shares, } \$ 8 , \text { cumulative, } 25,000 \text { shares } & \\\hline \text { authorized, } 5,000 \text { shares issued } & \$ 516,000 \\\hline \text { Common shares, } 100,000 \text { shares authorized, } 40,000 & \\\hline \text { shares issued } & \underline { 320,000 } \\\hline \text { Total contributed capital } & 836,000 \\\hline \text { Retained earnings } & \underline { 290,000 } \\\hline \text { Total shareholders' equity } & \$ 1,126,000 \\\hline\end{array}$$ The preferred shares are currently selling for $102.25 per share and the common shares are currently selling for $11.50 per share.
-Refer to Table 14-2.The entry to record the declaration of a 60% common stock dividend when the shares have a current market price of $15 per share includes a:

• A) debit to retained earnings for $360,000
• B) credit to common shares for $360,000
• C) debit to common stock dividend distributable for $360,000
• D) debit to common shares for $240,000

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Definitions:

Bladder

A hollow organ in the lower abdomen that stores urine before it is expelled from the body.

Pelvis

The lower part of the torso in humans and other vertebrates, consisting of the pelvis bones which surround and protect organs like the bladder and reproductive organs.

Nephron

The functional unit of the kidney, involved in the process of filtering the blood to form urine.

Kidney

An organ in vertebrates that functions in the excretion of waste products and the regulation of electrolyte balance.