Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On December 31, xxx1, the Retained Earnings account balance before the year-end closing process was $30,000. The company had an income of $12,000. In the
On December 31, xxx1, the Retained Earnings account balance before the year-end closing process was $30,000. The company had an income of $12,000. In the same date, the Board of Directors approved a restriction in Retained Earnings of $10,000 to be used for the construction of an expansion in the facilities. The company has 10,000 common stocks outstanding and $18,000 in the account balance of PIC in Excess of Par. (4 points) 23. When the company restricted the Retained Earnings, how this event will affect the accounting equation (Financial Statements-horizontal)? a) Decrease Cash and decrease Retained Earnings by $10,000, The cash flow will be affected by $10,000. b) Decrease PIC in Excess of Par Value and increase Appropriation of Retained Earnings by $10,000. c) Decrease Retained Earnings and increase Appropriation of Retained Earnings by $10,000. You MUST show your calculations: 24. If the potential obligation arises from a past event and the amount depends on some future event, the company must consider a: a) Gain Contingency b) Professional Judgment c) General Uncertainties d) Contingency Liability
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started