The following items appeared on the financial statements of Monroe,Inc.on December 31,2015:
On September 10,2016,when the market value of the Monroe stock was $140 the company declared and distributed an 8% stock dividend.Indicate whether each of the following statements is true or false.
_____ a)Retained earnings would increase by $224,000 as a result of the stock dividend.
_____ b)The balance in common stock would increase by $64,000 as a result of the stock dividend.
_____ c)Total paid-in capital would be $2,224,000 after the dividend had been distributed.
_____ d)Total equity would not be affected by the dividend.
_____ e)Cash flow from financing activities would increase by $224,000 as a result of the stock dividend.

Question

Quizplus · Accepted Answer

The Answer of The following items appeared on the financial statements of Monroe,Inc.on December 31,2015:
On September 10,2016,when the market value of the Monroe stock was $140 the company declared and distributed an 8% stock dividend.Indicate whether each of the following statements is true or false.
_____ a)Retained earnings would increase by $224,000 as a result of the stock dividend.
_____ b)The balance in common stock would increase by $64,000 as a result of the stock dividend.
_____ c)Total paid-in capital would be $2,224,000 after the dividend had been distributed.
_____ d)Total equity would not be affected by the dividend.
_____ e)Cash flow from financing activities would increase by $224,000 as a result of the stock dividend.

The Following Items Appeared on the Financial Statements of Monroe,Inc