Net Income and Retained Earning:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:The Borio Company had an asset with an $8
book value and a $7 market value; it decided to
distribute the asset as a property dividend.
Journal entries were made to adjust the
property to market value and declare the
dividend. Indicate the combined effect on the
Net Income and Retained Earnings, respectively:
Select one:
а.
Decrease, Decrease
b.
No Effect, Decrease
С.
No Effect, Increase
d.
Decrease, Increase
е.
Increase, Decrease
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