On august 1 2010 the board of directors of howell declared, Ask an Expert

Accounting

The stockholders' equity of Howell Company at July 31, 2010 is presented below:

Common stock, par value $20, authorized 400,000 shares;
issued and outstanding 160,000 shares $3,200,000
Paid-in capital in excess of par 160,000
Retained earnings 650,000
$4,010,000

On August 1, 2010, the board of directors of Howell declared a 15% stock dividend on common stock, to be distributed on September 15th. The market price of Howell's common stock was $35 on August 1, 2010, and $38 on September 15, 2010. What is the amount of the debit to retained earnings as a result of the declaration and distribution of this stock dividend?

a. $800,000.

b. $840,000.

c. $912,000.

d. $600,000.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M961369

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