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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 |
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