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How much should xyz decrease retained earnings

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Reference no: EM132954620

Question - XYZ Inc. has 1,500,000 shares of $1 par value common stock outstanding. The stock was originally issued for $5 per share in March 2017. On April 1, 2021, Smith declared a 10% stock dividend for shareholders of record when the fair value of the company's common stock was $30 per share. The stock dividend was distributed on April 30, 2021. The staff accountant is unsure of how much to reduce Retained Earnings for the impact of the stock dividend.

1. Accounting Issue: How much should XYZ decrease Retained Earnings for the impact of the stock dividend?

2. GAAP Codification Reference:

2.1 What is the Topic

2.2 what is the subtopic

2.3 What is the Section

2.4 What is the paragraph

3. Interpretation of the guidance: What is the correct amount to decrease Retained Earnings for the stock dividend?

Reference no: EM132954620

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