ACC 304 All Assignments ACC 304 All Assignments | Page 57

56. The declaration and issuance of a stock dividend larger than 25%
of the shares previously outstanding
a. increases common stock outstanding and increases total
stockholders' equity.
b. decreases retained earnings but does not change total stockholders'
equity.
c. may increase or decrease paid-in capital in excess of par but does
not change total stockholders' equity.
d. increases retained earnings and increases total stockholders' equity.
57. 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?
a. There should be no capitalization of retained earnings.