The following items appeared on the financial statements of Morrisey, Inc. on December 31, 2012: On September 10, 2013, when the market value of the Morrisey 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 $11,200 as a result of the stock dividend.
_____ b) The balance in common stock would increase by $32,000 as a result of the stock dividend.
_____ c) Total paid-in capital would be $111,200 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 $11,200 as a result of the stock dividend.

Question

The following items appeared on the financial statements of Morrisey, Inc. on December 31, 2012:  On September 10, 2013, when the market value of the Morrisey 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 $11,200 as a result of the stock dividend.
_____ b) The balance in common stock would increase by $32,000 as a result of the stock dividend.
_____ c) Total paid-in capital would be $111,200 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 $11,200 as a result of the stock dividend.

Quizplus · Accepted Answer

The Answer of The following items appeared on the financial statements of Morrisey, Inc. on December 31, 2012:  On September 10, 2013, when the market value of the Morrisey 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 $11,200 as a result of the stock dividend.
_____ b) The balance in common stock would increase by $32,000 as a result of the stock dividend.
_____ c) Total paid-in capital would be $111,200 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 $11,200 as a result of the stock dividend.

The Following Items Appeared on the Financial Statements of Morrisey