1. On January 1, Arjo Corporation had 60,000 shares of P10 par value common stock outstanding. On March 17, the company declared a 10% stock dividend to stockholders of record on March 20. Market value of the stock was P13 on March 17. The stock was distributed on March 30. The entry to record the transaction of March 30 would include a

a. credit to Cash for P60,000.

b. debit to Retained Earnings for P18,000.

c. credit to Premium in Share Capital for P18,000.

d. debit to Common Stock Dividends Distributable for P60,000.

2. Which one of the following is not necessary in order for a corporation to pay a cash dividend?

a. approval of stockholders

b. retained earnings

c. adequate cash

d. declaration of dividends by the board of directors