Samuel Corporation declared and distributed a 10 percent stock dividend on its $5 par common stock in November.10,000 shares of common were authorized,8,000 were issued and outstanding at the declaration.The market value on the date of declaration was $12 per share.The amount credited to Paid-in-Capital in Excess of Par Value-Common Stock is:

Question

Quizplus · Accepted Answer

First, let's calculate the total number of shares outstanding after the stock dividend:

8,000 shares x 10% = 800 shares

Total shares outstanding after the stock dividend: 8,800 shares

Next, we need to calculate the total value of the stock dividend:

800 shares x $12 per share = $9,600

The amount credited to Paid-in-Capital in Excess of Par Value-Common Stock is equal to the total value of the stock dividend minus the par value of the new shares issued:

($9,600 - (800 shares x $5 par value)) = $5,600

Therefore, the correct answer is C) $5,600.

Samuel Corporation Declared and Distributed a 10 Percent Stock Dividend