On September 1, Year 1, Orville Corporation has unrestricted Retained Earnings of $8,500,000, Appropriated Retained Earnings of $5,500,000, Cash of $10,000,000, and Accounts Payable of $2,000,000. What is the maximum amount that can be used for cash dividends?

Multiple Choice

$10,000,000

$8,500,000

$11,000,000

$3,000,000

In accordance with restrictive debt covenants, Maynard Company appropriated $20,000 of retained earnings. How would the appropriation affect the financial statements?

Multiple Choice

Decease retained earnings and increase appropriated retained earnings for $20,000.

Decrease appropriated retained earnings and increase retained earnings for $20,000.

Decrease appropriated retained earnings and decrease cash for $20,000.

No entry would be required.