On January 31,2018,Village Bank Had 500,000 Shares of $2 Par

question 93

Multiple Choice

On January 31,2018,Village Bank had 500,000 shares of $2 par value common stock outstanding.On that date,the company declared a 14% stock dividend when the market price of the stock was $37 per share.The immediate effect of this dividend upon Village Bank was:

• A)A reduction in cash of $2,590,000.
• B)A reduction in retained earnings of $2,590,000.
• C)A reduction in retained earnings of $140,000.
• D)A liability to the stockholders of $140,000.

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Definitions:

Mutual Gain

A situation or outcome in which all parties involved benefit or profit from the arrangement or transaction.

Potential Exchange

The possibility of trading goods, services, or other items of value between parties.

Trade

The exchange of goods, services, or both between two or more parties.

Negotiate

The process of discussing something with someone in order to reach a mutually agreed conclusion.