Caesar Corporation has 250,000 shares of $7-par common stock outstanding.They have declared a 7% stock dividend.The current market price of the common stock is $11/share.The amount that will be credited to Paid-in Capital in Excess of Par Common Stock on the date of declaration is:

Question

Quizplus · Accepted Answer

First, we need to calculate the number of shares that will be issued as a stock dividend. We can do this by multiplying the number of outstanding shares by the stock dividend percentage:
250,000 x 7% = 17,500
So, the company will issue 17,500 new shares as a stock dividend.

Next, we need to calculate the total value of the stock dividend. We can do this by multiplying the number of new shares by the current market price of the stock:
17,500 x $11 = $192,500

Finally, we need to calculate the portion of the total stock dividend that will be credited to Paid-in Capital in Excess of Par Common Stock. Since the par value of the stock is $7 and the market price is $11, the portion credited to Paid-in Capital in Excess of Par Common Stock will be:
($11 - $7) x 17,500 = $70,000

Therefore, the correct answer is C.

Caesar Corporation Has 250,000 Shares of $7-Par Common Stock Outstanding