Answer:
option A,$19,200
Explanation:
The amount stock dividend issued that needs to be transferred from retained earnings to paid-in capital accounts by debiting the retained earnings and crediting the paid-in capital accounts is computed by the below formula:
Stock dividend value=stock dividend %* issued shares*market price
stock dividend % is 4%
issued shares is 40,000 shares
market price of stock is $12
stock dividend value=4%*40,000*$12=$19,200
The correct option is $19,200 option A.
One should be misled by the issue price of $8 per share,since that gives a different option which is wrong
