A Corporation Had 50,000 Shares of $20 Par Value Common

question 104

Multiple Choice

A corporation had 50,000 shares of $20 par value common stock outstanding on July 1.Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27.The entry to record this dividend is:

• A)
• \(\begin{array}{|l|r|r|}
• \hline \text { Retained Earnings } & 135,000 & \\
• \hline \text { Common Stock Dividend Distributable } & & 135,000 \\
• \hline
• \end{array}\)
• B)
• \(\begin{array}{|l|r|r|}
• \hline \text { Retained Earnings } & 135,000 & \\
• \hline \text { Cash } & & 135,000 \\
• \hline
• \end{array}\)
• C)
• \(\begin{array}{|l|r|r|}
• \hline \text { Retained Earnings } & 135,000 & \\
• \hline \text { Common Stock Dividend Distributable } & & 100,000 \\
• \hline \begin{array}{l}
• \text { Contributed Capital in Excess of Par Value, } \\
• \text { Common Stock }
• \end{array} & & 35,000\\
• \hline
• \end{array}\)
• D)
• \[\begin{array} { | c | c | c | }
• \hline \text { Retained Earnings } & 100,000 & \\
• \hline \text { Common Stock Dividend Distributable } & & 100,000 \\
• \hline
• \end{array}\]
• E)No entry is made until the stock is issued

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