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Question 1: The Parson Company has 100,000 common shares issued and outstanding. This stock was issued several years ago at a price above the $10 per share par value. During the current year, the board of directors declared a 10 percent stock dividend so that 10,000 new shares were issued to the stockholders when the price of the stock was $24 per share. As a result of this dividend, what reduction was recorded reduction in total stockholders' equity ?
Option 1: $140,000
Option 2: -0-
Option 3: $240,000
Option 4: $100,000
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