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VLD [36.1K]
3 years ago
8

Aaron Company plans to issue a large stock dividend. In accounting for this transaction, what effects occur to the contributed c

apital section of stockholders' equity?
A. Common stock increases by the number of dividend shares x par value per share, and retained earnings decreases for the same amount

B. Retained earnings increases by the number of dividend shares x par value per share, and additional paid-in capital increases for the balance

C. Common stock increases by the number of dividend shares x par value per share, and retained earnings increases for the balance

D. Common stock increases by the total market value of the dividend
Business
1 answer:
belka [17]3 years ago
7 0

Answer:

Answer: A  Common stock increased by: Dividend shares × Par value per share. Retained earnings is decreased by the same amount.

Explanation

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Answer:

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Return on equity measures the return earned on the owners investment in the company.

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3 years ago
The total debits in the After-Closing Trial Balance will equal:______
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Complete Question:

Shown below is a trial balance for Novelty Toys, Inc., on December 31,after adjusting entries:

                                         Novelty Toys, Inc.

                                  Trial Balance December 31

Cash                                                $7,750

Accounts Receivable                     $6,375

Office Equipment                           $11,250

Accumulated Depreciation                                      $3,000

Accounts Payable                                                     $3,875  

Capital Stock                                                             $11,250

Retained Earnings                                                     $0

Dividends                                                                   $3,750

Fees Earned                                                             $22,750

Salaries Expense                                                      $8,000

Advertising Expense                      $1,625  

Depreciation Expense                   <u>$2,125 </u>              <u>                </u>

                                                       $40,875             $40,875

The total debits in the After-Closing Trial Balance will equal:

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b. $29,125.

c. $40,875.

d. $18,125.

Answer:

$25,375

Explanation:

The After-Closing Trial Balance is prepared once the closing entries are posted. This results in closing of expense and income accounts for the year and the resulting balance taken forward to retained earnings. This means that After-Closing Trial Balance would contain only permanent general accounts which are balance sheet items. In the given scenario, the balance sheet debit balances are as under:

Cash                                                $7,750

Accounts Receivable                     $6,375

Office Equipment                           <u>$11,250 </u>

Total Debit Balance                      <u>$25,375</u>

Hence the option A is correct.

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