Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please Explain how do they get the answer (decreased by 92,400) On October 1, 2016, Chief Corporation declared and issued a 12% stock dividend. Before

Please Explain how do they get the answer (decreased by 92,400)

On October 1, 2016, Chief Corporation declared and issued a 12% stock dividend. Before this date, Chief had 77,000 shares of $5 par common stock outstanding. The market value of Chief Corporation on the date of declaration was $10 per share. As a result of this dividend, Chief's retained earnings will:

Not change.

Increase by $92,400.

Decrease by $93,900.

Decrease by $92,400.

Solution:

Retained earnings (9,240 shares $10/share) 92,400
Common stock (9,240 shares $5/share) 46,200
Paid-in capitalexcess of par 46,200

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services

Authors: Alvin A. Arens . Randal J. Elder . Mark S. Beasley

18th Global Edition

1292448989, 978-1292448985

More Books

Students also viewed these Accounting questions