A corporation declared a stock dividend on November 1 and issued 9,000 shares of stock to its stockholders.Prior to the dividend,the balance in Retained Earnings was $850,000,the number of shares of $5 par value stock issued and outstanding was 60,000,and the market value of the stock was $12.This stock dividend will cause total stockholders' equity to:
A) remain unchanged.
B) increase by $45,000.
C) decrease by $108,000.
D) decrease by $63,000.

Question

Quizplus · Accepted Answer

A stock dividend does not change the total stockholders' equity; it only transfers an amount from retained earnings to paid-in capital.

A Corporation Declared a Stock Dividend on November 1 and Issued