tinson Corporation owned 40,000 shares of Matile Corporation. These shares were purchased in 2017 for $360,000. On November 15, 2021, Stinson declared a property dividend of one share of Matile for every ten shares of Stinson held by a stockholder. On that date, when the market price of Matile was $28 per share, there were 360,000 shares of Stinson outstanding. What gain and net reduction in retained earnings would result from this property dividend? Net Reduction in Gain Retained Earnings a. $0 $ 324,000 b. $0 $1,008,000 c. $684,000 $ 324,000 d. $684,000 $ 144,000
tinson Corporation owned 40,000 shares of Matile Corporation. These shares were purchased in 2017 for $360,000. On November 15, 2021, Stinson declared a property dividend of one share of Matile for every ten shares of Stinson held by a stockholder. On that date, when the market price of Matile was $28 per share, there were 360,000 shares of Stinson outstanding. What gain and net reduction in retained earnings would result from this property dividend? Net Reduction in Gain Retained Earnings a. $0 $ 324,000 b. $0 $1,008,000 c. $684,000 $ 324,000 d. $684,000 $ 144,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Stinson Corporation owned 40,000 shares of Matile Corporation. These shares were purchased in 2017 for $360,000. On November 15, 2021, Stinson declared a property dividend of one share of Matile for every ten shares of Stinson held by a stockholder. On that date, when the market price of Matile was $28 per share, there were 360,000 shares of Stinson outstanding. What gain and net reduction in
| | Net Reduction in |
| Gain | Retained Earnings |
| a. $0 | $ 324,000 |
| b. $0 | $1,008,000 |
| c. $684,000 | $ 324,000 |
| d. $684,000 | $ 144,000 |
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