Centurion Alarms recently declared a percent stock dividend Prior to the

Question

Centurion Alarms recently declared a 10 percent stock dividend. Prior to the stock dividend, the equity section on Centurion's balance sheet was:

Common stock (100,000 shares outstanding, $1 par value) $100,000

Additional paid-in capital 60,000

Retained earnings 90,000

Total common shareholders' equity $250,000

Centurion's stock currently sells for $4 per share. After the stock dividend is paid, the amount in the Common stock account should be _______ and the amount in the Retained earnings account should be ______.

a. $110,000; $50,000

b. $100,000; $90,000

c. $140,000; $50,000

d. $100,000; $50,000

e. $90,000; $110,000

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