Trendy Corp

question 84

Multiple Choice

Trendy Corp. recently declared a 10% stock dividend. As of the date of the announcement, Trendy had 10 million shares outstanding which were selling on the NYSE for $50 per share. An accounting entry is required on the balance sheet in order to transfer an amount from retained earnings to the common stock and additional paid-in capital accounts. What is the dollar amount of retained earnings that will be transferred from retained earnings to the common stock account as the result of the stock dividend? Assume that the par value of Trendy is $2 per share.

• A) $2 million
• B) $50 million
• C) $45.45 million
• D) $12.5 million

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Definitions:

Stretching

The process of gently extending muscles to increase muscle flexibility and joint range of motion.

Adhere

To adhere means to stick fast to a surface or substance, or to follow a set of beliefs or a course of action closely.

Cell Signaling

A complex system of communication that governs basic cellular activities and coordinates cell actions to ensure the survival, growth, and maintenance of living organisms.

Intercellular Junctions

Points of contact that connect the plasma membranes of tissue cells, facilitating communication and barrier functions.