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Question(s) / Instruction(s):

A company issued 40,000 shares of $5 common stock at $8. The company has now issued a 5% stock dividend when the market price of the stock is $10 a share. What is the amount transferred from the retained earnings account to paid-in capital accounts as a result of the stock dividend?  

a)            $10,000  

b)            $20,000  

c)            $16,000  

d)            $45,000  


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