Quirk corporation issued a 100% stock dividend of its common stock which had a par value of $10 before and after the dividend.  At what amount should retained earnings be capitalized for the additional shares issued? Instructions: which is the correct answer 1. There should be no capitalization of retained earnings 2. Par value 3. Fair value on the declaration date 4. Fair value on the payment date

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Quirk corporation issued a 100% stock dividend of its common stock which had a par value of $10 before and after the dividend.  At what amount should retained earnings be capitalized for the additional shares issued?

Instructions: which is the correct answer

1. There should be no capitalization of retained earnings

2. Par value

3. Fair value on the declaration date

4. Fair value on the payment date

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