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Tanzania [10]
3 years ago
9

A company with 100,000 authorized shares of $4 par common stock issued 40,000 shares at $8. Subsequently, the company 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
Business
1 answer:
zvonat [6]3 years ago
5 0

Answer:

$8,800

Explanation:

Stock dividend is a type of dividend which is paid in the form of additional shares in the company. It is declared as a ratio or percentage of outstanding shareholding in the company.

Stock Dividend = Numbers of outstanding shares x Stock Dividend percentage

Stock Dividend = 40,000 x 2% = 800 shares

Amount ot be transferred  = 800 x $11 = $8,800

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The computation of the company overhead application rate is shown below;

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