When a stock dividend is less than 20-25 percent of the common stock outstanding, a company is required to transfer the fair value of the stock issued from retained earnings.

Question

Quizplus · Accepted Answer

When a stock dividend is less than 20-25% of the common stock outstanding, it is considered a small (or ordinary) stock dividend and requires the company to transfer the fair value of the stock issued from retained earnings to capital stock.

When a Stock Dividend Is Less Than 20-25 Percent of the Common