Question

A company with 108,000 authorized shares of $4 par common stock issued 33,000 shares at $12. Subsequently, the company declared a 2% stock dividend on a date when the market price was $31 per share. What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend?

Answer 1

Answer:

$20,460

Explanation:

Data provided as per the question below:-

Common stock = 33,000 shares

Market price per share = $31

Stock dividend percentage = 2%

The computation of stock dividend is shown below:-

Price per share = Common stock × Market price per share

= 33,000 × $31

= $1,023,000

Stock dividend = Price per share × Stock dividend percentage

= $1,023,000 × 2%

= $20,460