At its date of incorporation, Sheridan Company issued 118000 shares of its $10 par common stock at $13 per share. During the current year, Sheridan acquired 18000 shares of its common stock at a price of $18 per share and accounted for them by the cost method. Subsequently, these shares were reissued at a price of $14 per share. There have been no other issuances or acquisitions of its own common stock. What effect does the reissuance of the stock have on the following accounts?

Retained Earnings

Additional Paid-in Capital

No effect

No effect

Decrease

No effect

Decrease

Decrease

No effect

Decrease

2.

Waterway Industries has 502000 shares of $10 par value common stock outstanding. During the year Waterway declared a 13% stock dividend when the market price of the stock was $36 per share. Three months later Waterway declared a $0.60 per share cash dividend. As a result of the dividends declared during the year, retained earnings decreased by

$2689716

$ 496980

$ 473300

$2349360

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