On June 1,2014,Revere Corporation Declared a Stock Dividend Entitling Its

question 54

Multiple Choice

On June 1,2014,Revere Corporation declared a stock dividend entitling its stockholders to one additional share for each share held.At the time the dividend was declared,the market value of the stock was $10 per share and the par value was $5 per share.On this date Revere had 1,000,000 shares of common stock authorized of which 500,000 shares were outstanding.Assuming the par value of the stock was NOT changed,what entry should Revere make to record this transaction?

• A) Retained Earnings .............5,000,000
• Common Stock Dividend Distributable 2,500,000
• Capital in Excess of Par.....2,500,000
• B) Stock Dividend Payable ........5,000,000
• Common Stock Dividend Distributable.2,500,000
• Capital in Excess of Par.....2,500,000
• C) Retained Earnings..............2,500,000
• Common Stock Dividend Distributable 2,500,000
• D) No entry

---

Definitions:

Modulator Valve

A device in hydraulic systems that regulates pressure or fluid flow, often used in automatic transmissions and braking systems.

Reverse Ratios

The gear ratios used when a vehicle is operating in reverse, determining the speed and torque available.

Allison TC10

A specific model of automatic transmission by Allison designed for medium to heavy-duty trucks, offering fuel efficiency and smooth shifting.

Forward Ratios

Refers to the gear ratios in a vehicle's transmission that are used when moving forward, influencing acceleration, performance, and fuel economy.