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On December 31, 2019, Shoreline Hotel Inc.., reported its shareholders' equity as follows: Common shares, no par value, authorized 200,000 shares issued and outstanding 120,000 shares                                               $1,350,000  Retained earnings                                                                             700,000 Total shareholders' equity                                                                        $2,050,000  On January 1, 2020, it declared a 10% stock dividend on its common shares when the market value of the common shares was $22 per share before market adjustment (ie: prior to ex-dividend value). What was the effect on Shoreline’s retained earnings as a result of the above transaction? Select one: a. $264,000 decrease . b. $135,000 decrease . c. $400,000 increase. d. $240,000 increase. e. None of the above answers.

On December 31, 2019, Shoreline Hotel Inc.., reported its shareholders' equity as follows: Common shares, no par value, authorized 200,000 shares issued and outstanding 120,000 shares                                               $1,350,000  Retained earnings                                                                             700,000 Total shareholders' equity                                                                        $2,050,000  On January 1, 2020, it declared a 10% stock dividend on its common shares when the market value of the common shares was $22 per share before market adjustment (ie: prior to ex-dividend value). What was the effect on Shoreline’s retained earnings as a result of the above transaction? Select one: a. $264,000 decrease . b. $135,000 decrease . c. $400,000 increase. d. $240,000 increase. e. None of the above answers.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 16E: Contributed Capital Adams Companys records provide the following information on December 31, 2019:...
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On December 31, 2019, Shoreline Hotel Inc.., reported its shareholders' equity as follows:

Common shares, no par value, authorized 200,000 shares

issued and outstanding 120,000 shares                                               $1,350,000 

Retained earnings                                                                             700,000

Total shareholders' equity                                                                        $2,050,000

 On January 1, 2020, it declared a 10% stock dividend on its common shares when the market value of the common shares was $22 per share before market adjustment (ie: prior to ex-dividend value).

What was the effect on Shoreline’s retained earnings as a result of the above transaction?

Select one:
a.
$264,000 decrease .
b.
$135,000 decrease .
c.
$400,000 increase.
d.
$240,000 increase.
e.
None of the above answers.
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