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Question

Apple Disney ESPN Yahool gold-soul la women's swi... .shophearts Cloud gold-soul la women's swi... shophearts Cloud Job Description Bing Yahoo Google Chapter 18 Quiz Ortega Inc. has a defined benefit pension plan. On De ,Quiz 0 Saved Help Save & Exit Submit On October 1,2018, Chief Corporation declared and issued a m% stock dividend. Before this date, Chief had 89000 shares of $5 par common stock outstanding. The market value of Chief Corporation on the date of declaration retained earnings will was $10 per share. As a result of this dividend, Chiefs Multiple Choice Not change. O Decrease by $97900 O Decrease by $99,400 O incease by Increase by $97900 8

Explanation / Answer

Decrease by $ 97,900

Working:

Number of shares outstanding      89,000 Stock Dividend as a percentage 11% Number of shares issued as a stock dividend        89,000 x 11% =         9,790 Market Price of shares $          10 Total Value of Stock dividend         9,790 x $            10 = $       97,900 On stock dividend declration, Retained earning is reduced on the date of declaration by $ 97,900

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