Wildcat, Inc

question 26

Multiple Choice

Wildcat, Inc. declared a 10% stock dividend when it had 150,000 shares of $1 par value common stock outstanding. The market price per share of common stock was $10 per share when the dividend was declared. The entry to record the stock dividend would include a credit to:

• A) Retained Earnings $150,000.
• B) Paid-in Capital in Excess of Par $135,000.
• C) Common Stock $150,000.
• D) Retained Earnings $15,000.

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Definitions:

Capital Investment

Funds invested in a business by the owners or shareholders to purchase assets or to provide working capital with the aim of generating long-term revenue and profits.

Net Loss

The result when a company's total expenses exceed its total revenues during a specific period, indicating a negative financial performance.

Capital Balance

The amount of money invested in a business by its owners plus any retained earnings or minus any losses.

Partnership Net Income

The total earnings derived from a partnership's business operations after subtracting all expenses, shared among the partners according to their agreement.