$1$ A corporation with $$10$ par common stock issues a large stock dividend. The capitalization of retained earnings is equal to:

Select one:

a$.$ The par value of the shares to be distributed.

b$.$ The par value of the shares outstanding.

c$.$ The market value of the shares to be distributed. Incorrect

d$.$ The market value of the shares outstanding.

e$.$ There is no capitalization of retained earnings in the case of a large stock dividend. $2$A company had a beginning balance in retained earnings of $$400,000.$ It had net income of $$50,000$ and declared and paid cash dividends of $$55,000$ in the current period. The ending balance in retained earnings equals:

Select one:

a$.$ $$505,000.$

b$.$ $$405,000.$ Incorrect

c$.$ $$395,000.$

d$.$ $$455,000.$

e$.$ $$350,000.$