Raptor Inc. has retained earnings of ($ 500,000) and total stockholders' equity of ($ 2,000,000). It has
Question:
Raptor Inc. has retained earnings of \(\$ 500,000\) and total stockholders' equity of \(\$ 2,000,000\). It has 100,000 shares of \(\$ 8\) par value common stock outstanding, which is currently selling for \(\$ 30\) per share. If Raptor declares a \(10 \%\) stock dividend on its common stock:
(a) net income will decrease by \(\$ 80,000\).
(b) retained earnings will decrease by \(\$ 80,000\) and total stockholders' equity will increase by \(\$ 80,000\).
(c) retained earnings will decrease by \(\$ 300,000\) and total stockholders' equity will increase by \(\$ 300,000\).
(d) retained earnings will decrease by \(\$ 300,000\) and total paid-in capital will increase by \(\$ 300,000\).
Step by Step Answer:
Accounting Tools For Business Decision Making
ISBN: 9780470377857
3rd Edition
Authors: Paul D. Kimmel