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A Company Issued 40,000 Shares of $5 Common Stock at $8

Question 2

Multiple Choice

A company issued 40,000 shares of $5 common stock at $8. The company has now issued a 5% stock dividend when the market price of the stock is $10 a share. What is the amount transferred from the Retained earnings account to the Paid-in capital accounts as a result of the stock dividend?


A) $10,000
B) $20,000
C) $16,000
D) $45,000

Correct Answer:

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