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The format displayed is used by Gee, Inc., for its Year 4 statement of changes in equity. When both the 100% and the 5% stock

The format displayed is used by Gee, Inc., for its Year 4 statement of changes in equity. When both the 100% and the 5% stock dividends were declared and distributed, Gees common stock was selling for more than its $1 par value.

Common

Additional

Stock

Paid-In

Retained

$1 par

Capital

Earnings

Balance at 1/1/Year 4

$90,000

$800,000

$175,000

Additions and deductions:

100% stock dividend

5% stock dividend

Balance at 12/31/Year 4

How would the 5% stock dividend affect the additional paid-in capital and retained earnings amounts reported in Gees Year 4 statement of equity?

Additional

Paid-in Capital

Retained Earnings

A.

Increase

Increase

B.

No change

Decrease

C.

Increase

Decrease

D.

No change

Increase

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