Zeman,IncDeclares and Distributes a 10% Common Stock Dividend When It

question 150

Multiple Choice

Zeman,Inc.declares and distributes a 10% common stock dividend when it has 30,000 shares of $10 par value common stock outstanding.If the market value of the common stock is $30,the journal entry to record the stock dividend would include a:

• A)credit to Common Stock $120,000.
• B)credit to Common Stock $60,000.
• C)credit to Paid-in Capital in Excess of Par-Common $60,000.
• D)credit to Paid-in Capital in Excess of Par-Common $30,000.

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Definitions:

Gift

A voluntary transfer of property or funds from one person to another without the expectation of receiving something in return.

Stock in Corporation

Shares representing ownership in a corporation, entitling the holder to dividends and certain rights under the corporation's governance.

Bailment

A legal relationship where one party temporarily transfers possession of property to another, under the agreement that the property will be returned.

Operates

To run or control the functioning of a system, machine, process, or organization.