On 28 February 2020, Xavier Ltd Declared and Distributed an 8

question 33

Multiple Choice

On 28 February 2020, Xavier Ltd declared and distributed an 8% share dividend (bonus issue) . At that date the entity's total share capital was $180 000, fully paid to $1. What is the effect of this dividend on Xavier Ltd's total shareholders' equity?

• A) No effect.
• B) Decrease of $14 400.
• C) Increase of $14 400.
• D) It depends on the current market value of the shares.

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Definitions:

Raw Materials

The basic components or inputs used in the production process to manufacture finished goods.

Direct Labour

Labor costs that are specifically traceable to the production of goods or provision of services.

Raw Materials

The basic materials and components required at the start of the production process to manufacture goods.

Total Manufacturing Costs

The sum of all costs associated with producing a product, including direct materials, direct labor, and manufacturing overhead.