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

question 71

Multiple Choice

A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 a share. The effect of the declaration and issuance of the stock dividend is to

• A) decrease retained earnings, increase common stock, and increase paid-in capital
• B) increase retained earnings, decrease common stock, and decrease paid-in capital
• C) increase retained earnings, decrease common stock, and increase paid-in capital
• D) decrease retained earnings, increase common stock, and decrease paid-in capital

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Definitions:

Food

Any nutritious substance that people or animals eat or drink or that plants absorb in order to maintain life and growth.

Semistarvation Diet

A diet that provides insufficient caloric intake to maintain normal body functions, often leading to severe physical and mental health consequences.

Anorexia Nervosa

Anorexia Nervosa is an eating disorder characterized by an intense fear of gaining weight and a distorted body image, leading to severe restriction of food intake.

Dieting

The practice of eating and drinking in a regulated manner to achieve or maintain a controlled weight.