On March 1, 2019, Baltimore Corporation had 90,000 shares of common stock outstanding with a par value of $5 per share

Accounting Oct 12, 2020

On March 1, 2019, Baltimore Corporation had 90,000 shares of common stock outstanding with a par value of $5 per share. On March 1, Baltimore Corporation authorized a 10% stock dividend when the market value was $12 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.

Expert Solution

Computation of Amount Either (Debited) or Credited to Retained Earnings:

No of shares outstanding = 90,000

Par value = $5 Per share

Dividend declared = 10%

Dividend to be paid from Retained Earnings = 90,000*$5*10% =$45,000

Retained earnings is to be debited by $45,000.

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