Able Company Receives a Stock Dividend of 50 Shares from Cole

question 167

Multiple Choice

Able Company receives a stock dividend of 50 shares from Cole Company. Able previously owned 750 shares of Cole stock that had a cost basis of $4,800. The cost basis per share of Cole stock is:

• A) $6.40.
• B) $6.00.
• C) $6.85.
• D) $96.

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Definitions:

Electronic Funds Transfer Act

A federal law that protects consumers engaging in the transfer of funds through electronic methods, ensuring their rights and establishing responsibilities for institutions.

Revised Article 4

An update or amendment to a section of the Uniform Commercial Code dealing primarily with bank deposits and collections.

Postdated Instrument

A financial instrument, such as a check, with a date in the future, indicating when it becomes payable.

Drawee Bank

The bank upon which a check is drawn, responsible for paying the check amount to the payee or bearer.