Wheaton Tire Inc., [WTI] reported the following excerpts from shareholders’ equity on January 1, 2021: Preferred shares, 0.90, 300,000 issued and outstanding $6,000,000 Common shares, 400,000 issued and outstanding $4,400,000 For This Question Only, assume that the company declared/distributed a 5% stock dividend on January 2, 2021 when the market price of the common shares was $10.50 each, prior to this dividend. What entry, if any, should WTI make to record this transaction? Select one: a. No Journal Entry required for this transaction. Only a Proforma Entry should be made. b. DR Retained Earnings, $210,000; CR Common Shares, $210,000 c. DR Retained Earnings, $200,000; CR Common Shares, $200,000 d. DR Retained Earnings, $220,000; CR Common Shares, $220,000 e. DR Retained Earnings, $225,000; CR Common Stock Dividend Distributable, $225,000.
Wheaton Tire Inc., [WTI] reported the following excerpts from shareholders’ equity on January 1, 2021: Preferred shares, 0.90, 300,000 issued and outstanding $6,000,000 Common shares, 400,000 issued and outstanding $4,400,000 For This Question Only, assume that the company declared/distributed a 5% stock dividend on January 2, 2021 when the market price of the common shares was $10.50 each, prior to this dividend. What entry, if any, should WTI make to record this transaction? Select one: a. No Journal Entry required for this transaction. Only a Proforma Entry should be made. b. DR Retained Earnings, $210,000; CR Common Shares, $210,000 c. DR Retained Earnings, $200,000; CR Common Shares, $200,000 d. DR Retained Earnings, $220,000; CR Common Shares, $220,000 e. DR Retained Earnings, $225,000; CR Common Stock Dividend Distributable, $225,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Wheaton Tire Inc., [WTI] reported the following excerpts from shareholders’ equity on January 1, 2021:
Common shares, 400,000 issued and outstanding $4,400,000
For This Question Only, assume that the company declared/distributed a 5% stock dividend on January 2, 2021 when the market price of the common shares was $10.50 each, prior to this dividend. What entry, if any, should WTI make to record this transaction?
Select one:
a.
No Journal Entry required for this transaction. Only a Proforma Entry should be made.
b.
DR Retained Earnings , $210,000; CR Common Shares, $210,000
c.
DR Retained Earnings, $200,000; CR Common Shares, $200,000
d.
DR Retained Earnings, $220,000; CR Common Shares, $220,000
e.
DR Retained Earnings, $225,000; CR Common Stock Dividend Distributable, $225,000.
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