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    Ending Retained Earnings

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    12/31/03, the stockholders' equity section of Clark Inc was

    Common stock, par value $10; authorized 30,000 shares;
    issued and outstanding 18,000 shares $180,000
    Additional paid in capital 232,000
    Retained earnings 522,000
    Total stockholders' equity $934,000

    On 3/31/04 Clark declared a 10% stock dividend, and accordingly 900 additional shares were issued, when the fair market value of the stock was $27 per share. For the three months ended 3/31/04 Clark sustained a net loss of $96,000. The balance of Clark's retained earnings as of 3/31/04 should be

    a. $404,400
    b. 426,000
    c. 399,000
    d. 377,400

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    Solution Preview

    There are 18,000 shares outstanding and a 10% stock dividend will result in 1,800 ...

    Solution Summary

    The solution explains how to calculate the ending retained earnings