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Sheffield Inc. has retained earnings of $509000 and total stockholders' equity of $2033000. It has 140000 shares of $8 par value common stock outstanding, which is currently selling for $30 per share. What will occur if Sheffield declares a 10% stock dividend on its common stock? Retained earnings will decrease by $420000 and total paid-in capital will increase by $420000. O Net income will decrease by $112000. O Retained earnings will decrease by $112000 and total stockholders' equity will increase by $112000. O Retained earnings will decrease by $420000 and total stockholders' equity will increase by $420000.

Sheffield Inc. has retained earnings of $509000 and total stockholders' equity of $2033000. It has 140000 shares of $8 par value common stock outstanding, which is currently selling for $30 per share. What will occur if Sheffield declares a 10% stock dividend on its common stock? Retained earnings will decrease by $420000 and total paid-in capital will increase by $420000. O Net income will decrease by $112000. O Retained earnings will decrease by $112000 and total stockholders' equity will increase by $112000. O Retained earnings will decrease by $420000 and total stockholders' equity will increase by $420000.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sheffield Inc. has retained earnings of $509000 and total stockholders' equity of $2033000. It has 140000 shares of $8 par value common stock outstanding, which is currently selling for $30 per share. What will occur if Sheffield declares a 10% stock dividend on its common stock? Retained earnings will decrease by $420000 and total paid-in capital will increase by $420000. Net income will decrease by $112000. Retained earnings will decrease by $112000 and total stockholders' equity will increase by $112000. O Retained earnings will decrease by $420000 and total stockholders' equity will increase by $420000.
Transcribed Image Text:Sheffield Inc. has retained earnings of $509000 and total stockholders' equity of $2033000. It has 140000 shares of $8 par value common stock outstanding, which is currently selling for $30 per share. What will occur if Sheffield declares a 10% stock dividend on its common stock? Retained earnings will decrease by $420000 and total paid-in capital will increase by $420000. Net income will decrease by $112000. Retained earnings will decrease by $112000 and total stockholders' equity will increase by $112000. O Retained earnings will decrease by $420000 and total stockholders' equity will increase by $420000.
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