SesameSweet Inc. has 220,000 shares outstanding with a market price of $12 per share. On the balance sheet, common stock is $760,000, and retained earnings are $275,000. There are no transactions costs.
Suppose SesameSweet declares a 10% stock dividend. What happens to the total owners' equity on the balance sheet?
A) The account remains unchanged.
B) The account increases by $22,000.
C) The account increases by $44,000.
D) The account increases by $242,000.
E) The account increases by $264,000.
Correct Answer:
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