A company declares and distributes a 30% common stock dividend to common stockholders. By how much will the retained earningsbalance be affected as a result of this transaction (note: consider any effects associated with closing entries)?Select one:O a. Retained earnings would not be reduced as a result of this transactionO b. Market value of the shares issuedBook value of the shares issuedOd. Minimum legal requirementO e. Par value of the shares issuedClear my choice

A stock dividend is a distribution of additional shares of common stock to existing shareholders,…

Answered: A company declares and distributes a…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter11: Stockholders' Equity

Section: Chapter Questions

Problem 11.1E

See similar textbooks

Similar questions

Please see attached image
Which of the following transactions will increase thereturn on equity?a. Declare and issue a stock dividend.b. Split the stock 2-for-1.c. Repurchase the company’s stock.d. None of the above.
Indicate by letter whether each of the transactions listed below increases (I), decreases (D), or has no effect (N) on retained earnings. Assume the shareholders' equity of the transacting company includes only common stock, paid-in capital–excess of par, and retained earnings at the time of each transaction. (Some transactions have two possible answers. Choose the best choice from the drop down menu. The first answer is provided as an example.) Transactions 1. Sale of common stock 2. Purchase of treasury stock at a cost less than the original issue price 3. Purchase of treasury stock at a cost greater than the original issue price 4. Declaration of a property dividend 5. Sale of treasury stock for more than cost 6. Sale of treasury stock for less than cost 7. Net income for the year 8. Declaration of a cash dividend 9. Payment of a previously declared cash dividend 10. Issuance of convertible bonds for cash 11. Declaration and distribution of a 5% stock dividend 12. Retirement of…
Which of the following is False in regards to Share premium account? a. It will be collected when the issue price is more than the par value of shares b. It will not be shown under current assets in the balance sheet c. It will be shown under the shareholders funds d. It will be collected when the par value of share is more than the issue price Trade receivables of XYZ SAOG company was OMR 16000 on 1st January 2019. A customer has gone bankrupt owing RO 1400, The debt is not expected to be recovered and an adjustment should be made at the end of the year 2019. An allowance for receivables of 5% is to be set up. What will be the Good Trade receivables to be shown under Current Assets on the balance sheet? a. OMR 13870 b. OMR 14600 c. OMR 15270 d. OMR 730
Match the following stockholders' equity concepts to the appropriate term (a-h). Question 12 options: Cash distribution of a company’s earnings to stockholders The date when dividends are actually distributed to stockholders Shares of common stock that were issued and then reacquired by a company Account used when shares are issued for an amount greater than par value The day of the event that creates a liability to company Equity account reflecting shares “owed” to stockholders Owners of this class of stock are entitled to receive dividends first The date that is used to determine the owners of stock who will receive the current dividend 1. cash dividend 2. date of record 3. Stock Dividends Distributable 4. date of declaration 5. treasury stock 6. preferred stock 7. date of payment 8. Paid-In Capital in Excess of Par
1. The cost method of accounting for stock investments is used when the company acquires a. Greater than 50% of the company's stock b. Between 20% to 50% of the company's stock c. Less than 20% of the company's stock 2. The significance of percentage of ownership relates to how much _____________ the acquiring company has in the new company. a. data b. control c. confidence
What terminology best describes the EPS (earnings per share) formula below? Net income available to common stockholders/ (number of shares outstanding+ potential shares from employee options and convertible debt) A-diluted EPS B-Basic EPS C- operating EPS D- adjusted EPS
Which of the following statements is true when dividends are not declared on cumulative preferred stock? Select one: O a. The undeclared dividends are accrued as a liability. O b. The shareholders must be allowed to convert their shares to common stock. Oc. The undeclared dividends accrue interest until paid. d. The undeclared dividends are disclosed in a note to the financial statements. Clear my choice
When common stock is issued at an amount greater than par value, the difference between the par value and the proceeds from the sale is recorded by crediting the common stock account O debiting an additional paid-in capital account O crediting the retained earnings account O crediting an additional paid-in capital account O
1. A company declared a cash dividend on its ordinary shares in December 2020 payable in January 2021. Retained earnings would A. increase on the date of declaration. B. not be affected on the date of payment C. not be affected on the date of declaration D. decrease on the date payment 2. Which of the following should be presented in the statement of changes in equity? A. Distributions to owners B. Investments by owners C. Change in ownership interest in subsidiary that does not result in a loss of control D. All of these are presented in the statement of changes in equity
which one is correct answer please confirm? QUESTION 20 The record date in the normal dividend payment procedure is ____. a. the same day as the ex-dividend date b. the same day as the declaration date c. one day prior to the payment date d. the date when the firm makes a list from its stock transfer books of shareholders eligible to receive the dividend
Which of the following decreases total equity? A. A stock split B. Recording Revenue C. The purchase of Treasury Stock D. Issuance of Convertible preferred stock

SEE MORE QUESTIONS

Recommended textbooks for you

Financial Accounting: The Impact on Decision Make…

Accounting

ISBN:

9781305654174

Author:

Gary A. Porter, Curtis L. Norton

Publisher:

Cengage Learning