please show work for better rating......Ducheyne Electric recently declared a 15

Question

please show work for better rating......Ducheyne Electric recently declared a 15 percent stock dividend. On the date of the stock dividend Ducheyne had 16 million shares outstanding priced at $46 per share in the market. An accounting entry was required on the balance sheet transferring some retained earnings to the common stock account. If retained earnings was $280 million prior to the transaction, what was the dollar amount of retained earnings after the transfer? a. $280.0 million b. $110.4 million c. $234.0 million d. $277.6 million e. $169.6 million

Explanation / Answer

Amount of transfer: 16,000,000 shares * 0.15 * $46.00 = $ 110,400,000.

Before stock dividend: RE =

$280.0 million

Less: transfer

(110.4 million)

RE after transfer

$169.6 million

e. $169.6 million

Before stock dividend: RE =

$280.0 million

Less: transfer

(110.4 million)

RE after transfer

$169.6 million

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