A company declares a 5% stock dividend. The debit to retained earnings is an amount equal to

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Abby Bell

Mathematics

1 August, 17:13

A company declares a 5% stock dividend. The debit to retained earnings is an amount equal to

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Kennedy Larson · Answer 1

A company declares a 5% stock dividend.

The debit to retained earnings is an amount equal to - the market value of the shares, that are to be issued.

We can say that a retained earnings balance is increased when we are using a credit and this is decreased when we make a debit.

A retained earnings is the total amount of money left, after all the expenses and dividends are paid by the company.