to nrovide this information 13) Moretown, Inc. had the following transactions in
ID: 2543052 • Letter: T
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to nrovide this information 13) Moretown, Inc. had the following transactions in 2017, its first year of operations: Issued 32,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $28.00 per share. . Earned net income of $80,000. $10,000 of dividends were paid and $20,000 of dividends were declared. At the end of 2017, what is total stockholders' equity? A) $896,000 B) $80,000 C) $976.000 D) $956,000 E) The answer cannot be determined. 14) Treasury stock is A) an asset account B) a liability account C) a contra equity account D) a contra asset account 15) ABC has 53,000 shares of $19.00 par common stock outstanding. ABC announces a stock split of 4-for-1. What is the effect of the split? A) par drops to $4.75 B) par stays at $19.00 C) par drops to $9.50 D) par goes to $76.00Explanation / Answer
13) Total Stockholder's Equity Common stock (32000*1)= 32000 paid in capital in excess of par (32000*27)= 864000 Retained earnings (80000-20000)= 60,000 Total stockholders Equity 956000 option D) $956000 (your option doesn’t seem correct since both declared and paid dividends will decrease retained earnings). But as you see if we deduct $10,000 cash dividend it will decrease stockholders equity to $946,000 which is not given in option hence I have deducted only $20,000 dividend 14) option c) a contra equity account 15) par drops t0 19/4 4.75 option A) par drops to $4.75
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