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saloni

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· 1 Months ago

please explain the solution of above question

Question:
Following is the information related to capital structure of company "B" before issue of stock dividends: Common Stock (Rs. 5 per share, 2.0 lac shares), Capital surplus 5.0 lacs & Retained earning of Rs. 5.0 lacs. With the issue of additional stock of 10,000 shares with market price of Rs. 20 per share, the retained earnings will now be:- 
Options:
A) 5 lacs 
B) 4.5 lacs 
C) 3 lacs 
D) 9 lacs 
E)

None of these

Solution:

Ans (b)

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