On March I, 2009, the Miranda Company purchased 2,000 shares ofits common stock for $25 per share for
the treasury. On July I, 2009, 1,000 of the treasury shares weresold for $30 per share. On October I, 2009, 1,000 of the treasuryshares were sold at $15 per share.
On January I, 2009, Miranda's balance in Retained Earnings was$100,000. During the year, the company
had net income of $20,000 and paid dividends of $5,000
43. Refer to question #56. By what amount did Treasury Stockchange, if at all? (If the account
balance or amount did not change, state your answer as "$0.")
44. Refer to question #56. By what amount did Total Equitychange, if at all? (If the account
balance or amount did not change, state your answer as "$0.")
45. Which of the following is true regarding the sale oftreasury stock on October I?
a. Treasury stock decreased and Total Equity decreased
b. Treasury stock decreased and Total Equity increased
c. Treasury stock increased and Total Equity decreased
d. Treasury stock increased and Total Equity increased
e. None of the above
46. Refer to question #59. By what amount did Treasury Stockchange, if at all? (If the account
balance or amount did not change, state your answer as "$0.")
47 Refer to question #59. By what amount did Total Equitychange, if at all? (If the account
balance or amount did not change, state your answer as "$0.")
48. What is the balance in Retained Earnings at the end of theyear?
Use the following information to answer the next 10questions:
A company with I 00,000 authorized shares of $4 par common stockissued 50,000 shares at $9 per share Subsequently, the companydeclared and issued a I0% stock dividend. The market price of theshares is $20 per share.
49. What is the effect of the dividend on RetainedEarnings?
a. Retained earnings decreased
b. Retained earnings increased
c. Retained earnings remained the same
d. None of the above
50. Refer to the previous question. By what amount did RetainedEarnings change, if at all? (If the account balance or
amount did not change,_ state your answer·as "$0.")
51. What is the effect of the dividend on Common Stock?
a. Common Stock decreased
b. Common Stock increased
c. Common Stock remained the same
d. None of the above
54. Refer to the previous question. By what amount did Paid-inCapital change, if at all? (If the account balance or amount didnot change, state your answer as "$0.")
55. What is the effect of the dividend on the number of sharesoutstanding?
a. The number decreased
b. The number increased
c. The number remained·the same
d. None of the above
56. Refer to the previous question. By what amount did thenumber of shares outstanding change, if at all? (If theaccount
balance or amount did not change, state your answer as "$0.")
57. What is the effect of the dividend on total equity and totalassets?
a. Total equity decreased and total assets decreased
b. Total equity decreased and total assets increased
c. Total equity increased and total assets decreased
d. Total equity increased and total assets increased
e. None of the above
On March I, 2009, the Miranda Company purchased 2,000 shares ofits common stock for $25 per share for
the treasury. On July I, 2009, 1,000 of the treasury shares weresold for $30 per share. On October I, 2009, 1,000 of the treasuryshares were sold at $15 per share.
On January I, 2009, Miranda's balance in Retained Earnings was$100,000. During the year, the company
had net income of $20,000 and paid dividends of $5,000
43. Refer to question #56. By what amount did Treasury Stockchange, if at all? (If the account
balance or amount did not change, state your answer as "$0.")
44. Refer to question #56. By what amount did Total Equitychange, if at all? (If the account
balance or amount did not change, state your answer as "$0.")
45. Which of the following is true regarding the sale oftreasury stock on October I?
a. Treasury stock decreased and Total Equity decreased
b. Treasury stock decreased and Total Equity increased
c. Treasury stock increased and Total Equity decreased
d. Treasury stock increased and Total Equity increased
e. None of the above
46. Refer to question #59. By what amount did Treasury Stockchange, if at all? (If the account
balance or amount did not change, state your answer as "$0.")
47 Refer to question #59. By what amount did Total Equitychange, if at all? (If the account
balance or amount did not change, state your answer as "$0.")
48. What is the balance in Retained Earnings at the end of theyear?
Use the following information to answer the next 10questions:
A company with I 00,000 authorized shares of $4 par common stockissued 50,000 shares at $9 per share Subsequently, the companydeclared and issued a I0% stock dividend. The market price of theshares is $20 per share.
49. What is the effect of the dividend on RetainedEarnings?
a. Retained earnings decreased
b. Retained earnings increased
c. Retained earnings remained the same
d. None of the above
50. Refer to the previous question. By what amount did RetainedEarnings change, if at all? (If the account balance or
amount did not change,_ state your answer·as "$0.")
51. What is the effect of the dividend on Common Stock?
a. Common Stock decreased
b. Common Stock increased
c. Common Stock remained the same
d. None of the above
54. Refer to the previous question. By what amount did Paid-inCapital change, if at all? (If the account balance or amount didnot change, state your answer as "$0.")
55. What is the effect of the dividend on the number of sharesoutstanding?
a. The number decreased
b. The number increased
c. The number remained·the same
d. None of the above
56. Refer to the previous question. By what amount did thenumber of shares outstanding change, if at all? (If theaccount
balance or amount did not change, state your answer as "$0.")
57. What is the effect of the dividend on total equity and totalassets?
a. Total equity decreased and total assets decreased
b. Total equity decreased and total assets increased
c. Total equity increased and total assets decreased
d. Total equity increased and total assets increased
e. None of the above
