A is incorrect because the transaction is based on market value and NOT par value
B is incorrect because 30% is considered a large stock dividend (greater than 25%) and this would be represented by a transfer from R/E to PIC based on par value.
D is incorrect for obvious reasons.
C is correct because the dividend is paid from R/E will result in a reduction to R/E based on the FMV of the stock.
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Michael Henry
Controller
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Original Message:
Sent: 04-19-2021 01:52 PM
From: Troy Persaud
Subject: Stock Dividend
C is the correct answer here because the other choices are 100% incorrect. But I think C has some flaws. There is never a payment for stock dividends.
Any thoughts?