For Individuals For Educators

Ace your certifications with Practice Exams and AI assistance.

Browse Exams
For Educators
Blog

Privacy Policy
Terms of Service
Cookie Policy
Support

AWS SAA Exam Prep
PMI PMP Exam Prep
CPA Exam Prep
GCP PCA Exam Prep

© 2026 TinyHive Labs. Company number 16262776.

Practice CPA®CPA FAR Practice Exam 5Question 33

Medium1 markMultiple Choice

Area II: Balance Sheet AccountsFAREquity

CPA · Question 33 · Area II: Balance Sheet Accounts

A company declares a 15% stock dividend when the market price is $30 and par value is $10. There are 10,000 shares outstanding. <br/><br/>What is the debit to Retained Earnings?

Answer options:

A.

$15,000

B.

$30,000

C.

$45,000

D.

$0

How to approach this question

Small Stock Dividend (<20-25%): Debit RE for Market Value. <br/>Large Stock Dividend (>25%): Debit RE for Par Value.

Full Answer

C.$45,000✓ Correct

C

Shares issued = 10,000 * 15% = 1,500.<br/>Small dividend rule: Use Market Value.<br/>Debit RE = 1,500 shares * $30 = $45,000.

Common mistakes

Using par value for a small stock dividend.

Question 32 All questions Question 34

Practice the full CPA FAR Practice Exam 5

50 questions · hints · full answers · grading

Sign up free Take the exam

More questions from this exam

Q01Vanguard Corp. reported net income of $750,000 for the current year. Relevant balance sheet accou...Hard Q02On January 1, Year 1, Parent Co. acquired 80% of Sub Co. for $800,000. The fair value of the nonc...Hard Q03A nongovernmental not-for-profit organization received the following contributions during Year 1:...Hard Q04City of Oakville issued $2,000,000 in general obligation bonds at 101 to finance the construction...Hard Q05TechSol Inc. has 100,000 shares of common stock outstanding throughout Year 1. Net income was $40...Hard

View all 50 questions →