A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 a share. The effect of the declaration and issuance of the stock dividend is to a.decrease retained earnings, increase common stock, and decrease paid-in capital b.increase retained earnings, decrease common stock, and increase paid-in capital c.increase retained earnings, decrease common stock, and decrease paid-in capital d.decrease retained earnings, increase common stock, and increase paid-in capital

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 a share. The effect of the declaration and issuance of the stock dividend is to

a.decrease retained earnings, increase common stock, and decrease paid-in capital
b.increase retained earnings, decrease common stock, and increase paid-in capital
c.increase retained earnings, decrease common stock, and decrease paid-in capital
d.decrease retained earnings, increase common stock, and increase paid-in capital
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