A)

On June 27, 2021, Cara Van Travel distributed to its common shareholders 570,000 outstanding common shares of its investment in Constance Noring Pillows. The book value on Van's books of Noring's $1 par common stock was $3.70 per share. Immediately after the distribution, the market price of Noring's stock was $4.20 per share. In its income statement for the year ended June 30, 2023, what amount should Noring report as gain on disposal of the stock (ignore taxes)?

B)

Rick Co. had 32 million shares of $1 par common stock outstanding at January 1, 2021. In October 2021, Rick Co.'s Board of Directors declared and distributed a 1% common stock dividend when the market value of its common stock was $55 per share. In recording this transaction, Rick would:

Multiple Choice

• Credit common stock for $17.60 million.

• Debit retained earnings for $17.60 million.

• None of these answer choices are correct.

• Credit paid-in capitalexcess of par for $17.60 million.