Question
[The following information applies to the questions displayed below.] Gilligan Corporation was established on February 15, Year 1. Gilligan is authorized to issue 500,000 shares
[The following information applies to the questions displayed below.] Gilligan Corporation was established on February 15, Year 1. Gilligan is authorized to issue 500,000 shares of $6.00 par value common stock. As of December 31, Year 3, Gilligan's stockholders' equity accounts report the following balances:
Common stock, $6 par, 500,000 shares authorized, 55,000 shares issued and outstanding | $ | 330,000 | ||||
Paid-in capital in excess of par - Common | 440,000 | |||||
$ | 770,000 | |||||
Retained earnings | 1,400,000 | |||||
Total Stockholders Equity | $ | 2,170,000 | ||||
At the end of Year 3, Gilligan decides to issue a 5% stock dividend. At the time of issue, the market price of the stock was $22 per share.
What is the amount of retained earnings that will be transferred to paid-in capital as a result of the stock dividend issued by Gilligan Corporation?
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$60,500
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$16,500
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$44,000
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$108,500
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