As of December 31, 2021, Warner Corporation reported the following: Cash dividends payable $ 30,000 Treasury stock 700,000 Paid-in capital—share repurchase 30,000 Common stock and other paid-in capital accounts 5,000,000 Retained earnings 4,000,000 During 2022, half of the treasury stock was resold for $260,000; net income was $700,000; cash dividends declared were $1,600,000; and stock dividends declared were $600,000. The 2022 sale of half of the treasury stock would: Multiple Choice Reduce income before tax by $90,000 Reduce retained earnings by $60,000 Increase total shareholders' equity by $350,000 Reduce retained earnings by $90,000
As of December 31, 2021, Warner Corporation reported the following: Cash dividends payable $ 30,000 Treasury stock 700,000 Paid-in capital—share repurchase 30,000 Common stock and other paid-in capital accounts 5,000,000 Retained earnings 4,000,000 During 2022, half of the treasury stock was resold for $260,000; net income was $700,000; cash dividends declared were $1,600,000; and stock dividends declared were $600,000. The 2022 sale of half of the treasury stock would: Multiple Choice Reduce income before tax by $90,000 Reduce retained earnings by $60,000 Increase total shareholders' equity by $350,000 Reduce retained earnings by $90,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
As of December 31, 2021, Warner Corporation reported the following:
| Cash dividends payable | $ | 30,000 | |
| 700,000 | |||
| Paid-in capital—share repurchase | 30,000 | ||
| Common stock and other paid-in capital accounts | 5,000,000 | ||
| 4,000,000 | |||
During 2022, half of the treasury stock was resold for $260,000; net income was $700,000; cash dividends declared were $1,600,000; and stock dividends declared were $600,000.
The 2022 sale of half of the treasury stock would:
Multiple Choice
-
Reduce income before tax by $90,000
-
Reduce retained earnings by $60,000
-
Increase total shareholders' equity by $350,000
-
Reduce retained earnings by $90,000
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