Elite Electrical has 350,000 shares of $3-par common stock outstanding.They have declared a 5% stock dividend.The current market price of the common stock is $7.50/share.The amount that will be credited to common stock on the date of declaration is:

Question

Quizplus · Accepted Answer

The amount credited to common stock is calculated by multiplying the number of shares in the stock dividend by the par value per share. The stock dividend is 5% of 350,000 shares, which is 17,500 shares. At a par value of $3 per share, the amount credited is 17,500 shares * $3 = $52,500.

Elite Electrical Has 350,000 Shares of $3-Par Common Stock Outstanding