Question
A company had beginning retained earnings of $60,000. During the year the company had net income of $20,000, and paid dividends of $7,500. On the
A company had beginning retained earnings of $60,000. During the year the company had net income of $20,000, and paid dividends of $7,500.
On the other hand, the company repurchased 1,000 shares of its stock for $45 during the period.
What is the effect of each of these transactions on the items shown below?
Select one:
a. decrease Retained earnings; decrease Total shareholders equity
b. increase Retained earnings; decrease Total shareholders equity
c. increase Retained earnings; increase Total shareholders equity
d. I dont know
e. decrease Retained earnings; increase Total shareholders equity
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