Manego Company has retained earnings of $600,000, common stock of $700,000, and total common stockholders’ equity of $1,400,000. It has 100,000 shares of $7 par value common stock outstanding which is currently selling for $20 per share. If Manego Company declares a 15% stock dividend on its common stock, which of the following will occur? Retained earnings will decrease by $300,000 and common stock will increase by $300,000. Net income will decrease by $300,000. Retained earnings will decrease by $300,000 and total paid-in capital will increase by $300,000. Retained earnings will increase by $300,000 and total paid-in capital will decrease by $300,000.
Manego Company has retained earnings of $600,000, common stock of $700,000, and total common stockholders’ equity of $1,400,000. It has 100,000 shares of $7 par value common stock outstanding which is currently selling for $20 per share. If Manego Company declares a 15% stock dividend on its common stock, which of the following will occur? Retained earnings will decrease by $300,000 and common stock will increase by $300,000. Net income will decrease by $300,000. Retained earnings will decrease by $300,000 and total paid-in capital will increase by $300,000. Retained earnings will increase by $300,000 and total paid-in capital will decrease by $300,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Manego Company has retained earnings of $600,000, common stock of $700,000, and total common
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Retained earnings will decrease by $300,000 and common stock will increase by $300,000. |
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Net income will decrease by $300,000. |
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Retained earnings will decrease by $300,000 and total paid-in capital will increase by $300,000. |
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Retained earnings will increase by $300,000 and total paid-in capital will decrease by $300,000. |
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