A Company with 100,000 Authorized Shares of $4 Par Common

question 37

Multiple Choice

A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company declared a 2% stock dividend on a date when the market price was $11 a share. What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend?

• A) $3,200
• B) $6,400
• C) $4,800
• D) $8,800

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Definitions:

Nitrogen

A chemical element with symbol N and atomic number 7, essential for all living organisms as a constituent of proteins.

Synergistic Interaction

A situation where two or more substances or actions combine to produce a total effect greater than the sum of their individual effects.

Isotopes

Variants of a particular chemical element that differ in neutron number, and consequently in nucleon number, but have the same number of protons in their atomic nuclei.

Neutrons

Subatomic particles located within the nucleus of an atom, having no electric charge and a mass slightly larger than that of protons.