A corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $25.00 per share. Common Stock, $6 par, 126,000 shares authorized, 56,000 shares issued and outstanding Paid in Capital in Excess of Par Retained Earnings Total Stockholders' Equity $336,000 178,000 600,000 $1,114,000 Which of the following would be included in the entry to record the distribution of a 15% stock dividend? O Common Stock-$6 Par Value would be credited for $50,400. O Paid-In Capital in Excess of Par-Common is debited for $113,400. O Stock Dividends would be debited for $113,400. Stock Dividends would be credited for $50,400.
A corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $25.00 per share. Common Stock, $6 par, 126,000 shares authorized, 56,000 shares issued and outstanding Paid in Capital in Excess of Par Retained Earnings Total Stockholders' Equity $336,000 178,000 600,000 $1,114,000 Which of the following would be included in the entry to record the distribution of a 15% stock dividend? O Common Stock-$6 Par Value would be credited for $50,400. O Paid-In Capital in Excess of Par-Common is debited for $113,400. O Stock Dividends would be debited for $113,400. Stock Dividends would be credited for $50,400.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:A corporation reported the following equity section on its current balance sheet. The common stock is currently selling for $25.00 per share.
| Component | Amount |
|----------------------------------------|------------|
| Common Stock, $6 par, 126,000 shares authorized, 56,000 shares issued and outstanding | $336,000 |
| Paid in Capital in Excess of Par | $178,000 |
| Retained Earnings | $600,000 |
| **Total Stockholders' Equity** | **$1,114,000** |
Below is a multiple-choice question regarding the equity section:
Which of the following would be included in the entry to record the distribution of a 15% stock dividend?
- ○ Common Stock—$6 Par Value would be credited for $50,400.
- ○ Paid-In Capital in Excess of Par—Common is debited for $113,400.
- ○ Stock Dividends would be debited for $113,400.
- ○ Stock Dividends would be credited for $50,400.
Expert Solution
Step 1
Answer:-
Common stock meaning:- Common stock is a type of security that denotes the ownership in a company. In the long term, this type of equity ownership typically produces higher rates of return. But in the event of liquidation, common shareholders are only entitled to the assets of the company after bondholders preferred shareholders, and other debt holders have been fully compensated.
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