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6 April, 16:09

On March 1, 2019, Baltimore Corporation had 60,000 shares of common stock outstanding with a par value of $5 per share. On March 1, Baltimore Corporation authorized a 20% stock dividend when the market value was $16 per share. Use this information to calculate the amount either (debited) or credited to retained earnings. Enter as a negative number if retained earnings is debited and a positive number if retained earnings is credited.

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  1. 6 April, 19:23
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    The retained earning would be debited by ($60,000)

    Explanation:

    According to the given data we have the following:

    Number of shares outstanding=60,000

    par value of $5 per share

    stock dividend declared=cc

    Therefore, to calculate the amount either (debited) or credited to retained earnings we would have to make the followin calculation:

    Dividend value=Number of shares outstanding*par value of $5 per share*stock dividend declared

    Dividend value=60,000*$5*20%

    Dividend value = ($60,000)

    Therefore, as the dividend paid reduces retained earnings, the retained earning would be debited by ($60,000)
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