Question: Blaylock Industries declared and distributed a 1 0 % stock dividend on 4 0 , 0 0 0 shares of issued and outstanding $ 5

Blaylock Industries declared and distributed a

10 %

stock dividend on

40, 000

shares of issued and outstanding $

5

par value common stock. The market price per share was $

9

on the declaration date. Which of the following correctly describes the effect of accounting for the declaration and distribution of the stock dividend?

Multiple Choice

Additional paid

-

in capital increased $

16, 000 .

Retained earnings decreased $

20, 000 .

Common stock increased $

2, 000 .

Retained earnings decreased $

16, 000 .

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