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Rick Co. had 21 million shares of $3 par common stock outstanding at January 1,...

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Accounting

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Rick Co. had 21 million shares of $3 par common stock outstanding at January 1, 2009. In October, 2009, Rick Co.'s Board of Directors declared and distributed a 4% common stock dividend when the market value of its common stock was $50 per share. In recording this transaction, Rick would: a) Debit retained earnings for $31.5 million b) Credit common stock for $42 million c) Debit retained earnings for $42 million d) Credit paid-in capital excess of par for $31.5 million On October 1, 2009, Chief Corporation declared and issued a 50% stock dividend. Prior to this date, Chief had 75,000 shares of $5 par common stock outstanding. The market value of Chief Corporation on the date of declaration was $10 per share. As a result of this dividend, Chief's retained earnings will: a) Decrease by $187,500. b) Increase by $97,500. c) Decrease by $375,000. d) Decrease by $97,500

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