The 12/31/2018 balance sheet of Despot Inc. included the following: In January 2018, Despot recorded a transaction with this journal entry:
- Despot declared a property dividend to give marketable equity securities to its common stockholders. The securities had cost Despot $7 million and currently have a fair value of $16 million. Which of the following would be included in recording the property dividend declaration?
A) Increase in a liability for $16 million.
B) Decrease in retained earnings for $7 million.
C) Decrease in marketable securities by $16 million.
D) All of these answer choices are correct.

Question

The 12/31/2018 balance sheet of Despot Inc. included the following:  In January 2018, Despot recorded a transaction with this journal entry: 
- Despot declared a property dividend to give marketable equity securities to its common stockholders. The securities had cost Despot $7 million and currently have a fair value of $16 million. Which of the following would be included in recording the property dividend declaration?
A) Increase in a liability for $16 million. 
B) Decrease in retained earnings for $7 million. 
C) Decrease in marketable securities by $16 million. 
D) All of these answer choices are correct.

Quizplus · Accepted Answer

The Answer of The 12/31/2018 balance sheet of Despot Inc. included the following:  In January 2018, Despot recorded a transaction with this journal entry: 
- Despot declared a property dividend to give marketable equity securities to its common stockholders. The securities had cost Despot $7 million and currently have a fair value of $16 million. Which of the following would be included in recording the property dividend declaration?
A) Increase in a liability for $16 million. 
B) Decrease in retained earnings for $7 million. 
C) Decrease in marketable securities by $16 million. 
D) All of these answer choices are correct.

The 12/31/2018 Balance Sheet of Despot Inc