The declaration and issuance of a stock dividend larger than 25% of the shares previously outstanding
A) increases common stock outstanding and increases total stockholders' equity.
B) decreases retained earnings but does not change total stockholders' equity.
C) may increase or decrease paid-in capital in excess of par but does not change total stockholders' equity.
D) increases retained earnings and increases total stockholders' equity.

Question

Quizplus · Accepted Answer

A stock dividend larger than 25% is considered a large stock dividend and is recorded by transferring the par value of the additional shares from retained earnings to common stock, thus decreasing retained earnings but not affecting total stockholders' equity.

The Declaration and Issuance of a Stock Dividend Larger Than