Answer:
d) All of these answer choices are correct.
Explanation:
The dollar amount of stock dividends declared is computed thus:
Stock dividends declared=outstanding shares*market price per share*stock dividend rate
stock dividends declared=2,000,000*$15*20%=$6,000,000
Hence, option C is correct since stock dividends account increased by $6,000,000
Besides, the amount to be credited to paid-in capital in excess of par is computed thus:
Paid-in Capital in Excess of Par=amount of stock dividends-par value of stocks dividends
par value of stocks dividend=2,000,000*$12*20%=$4,000,000
Paid-in Capital in Excess of Par=$6,000,000-$4,000,000=$2,000,000
The double entries would include a debit of $6,000,000 to retained earnings while common stock and paid-in capital in excess of par are credited with $4,000,000 and $2,000,000 respectively, as a result, the total stockholders equity was unaffected since retained earnings where the stocks dividends were paid is part of stockholders' equity
