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:

Hue

The color of light, as determined by its wavelength.

Sensorineural Deafness

A type of hearing loss resulting from damage to the inner ear or the neural pathways from the inner ear to the brain.

Blind Spot

The area of the retina where axons from ganglion cells meet to form the optic nerve.

Pitch

The highness or lowness of a sound, as determined by the frequency of the sound waves.