CarWorks Company has 100,000 authorized shares of $4 par common stock.The company issued 40,000 shares at $8.Subsequently,CarWorks declared a 2% stock dividend on a date when the market price was $11 a share.What is the amount transferred from the Retained Earnings account to paid-in capital accounts as a result of the stock dividend?

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Quizplus · Accepted Answer

The amount transferred from Retained Earnings to paid-in capital is calculated by multiplying the number of shares issued (40,000) by the stock dividend percentage (2%) and the market price per share ($11). This results in 800 shares (40,000 * 0.02) multiplied by $11, totaling $8,800.

CarWorks Company Has 100,000 Authorized Shares of $4 Par Common