The issuer of a 5% common stock dividend to common stockholders preferably should transfer from retained earnings to contributed capital an amount equal to the

The issuer of a 5% common stock dividend to common stockholders preferably should transfer from retained earnings to contributed capital an amount equal to the

a. market value of the shares issued.
b. book value of the shares issued.
c. minimum legal requirements.
d. par or stated value of the shares issued.


Answer: market value of the shares issued

At the date of declaration of a small common stock dividend, the entry should not include

a. a credit to Common Stock Dividend Payable.
b. a credit to Paid-in Capital in Excess of Par.
c. a debit to Retained Earnings.
d. All of these are acceptable.


Answer: a credit to Common Stock Dividend Payable

The balance in Common Stock Dividend Distributable should be reported as a(n)

a. deduction from common stock issued.
b. addition to capital stock.
c. current liability.
d. contra current asset.


Answer: addition to capital stock.