When a Subsidiary Issues a Stock Dividend, an Amount Equal

question 12

Multiple Choice

When a subsidiary issues a stock dividend, an amount equal to the fair value of the shares should be removed from retained earnings and transferred to paid-in-capital in excess of par, if the distribution:

• A)​is less than 20% of the previously outstanding shares.
• B)​exceeds 20% of the previously outstanding shares.
• C)​is more than 50% of the previously outstanding shares.
• D)​does not exceed 20% to 25% of the previously outstanding shares.

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