Raptor Inc. has Retained earnings of $500,000 and Total stockholders’ equity of $2,000,000

Raptor Inc. has Retained earnings of $500,000 and Total stockholders’ equity of $2,000,000. It has 100,000 shares of $8 par value common stock outstanding, which is currently selling for $30 per share. If Raptor declares a 10% stock dividend on its common stock

Retained earnings will decrease by $300,000 and Total stockholders’ equity will increase by $300,000.

Retained earnings will decrease by $80,000 and Total stockholders’ equity will increase by $80,000.

Retained earnings will decrease by $300,000 and Total paid-in capital will increase by $300,000.

Net income will decrease by $80,000.

This is a true statement. Retained earnings will decrease by $300,000 and Total paid-in capital will increase by $300,000.

In the stockholders’ equity section, Common Stock Dividends Distributable is reported as a(n)

deduction from Retained earnings.

addition to Capital stock.

deduction from Total paid-in capital and Retained earnings.

addition to Additional paid-in capital.

Common Stock Dividends Distributable is reported as an addition to Capital stock.