OPQ company was authorized to issue 100,000 common stocks with $10 par value. During the year xox1, issued 30,000 shares for $15 market value. On December 1, xxx1, declared cash dividends for $2 per share to be paid on December 30, to registered stockholders as of December 15. (4 points) 21. When the company declared dividends, how this event will affect the accounting equation (Financial Statements- horizontal)? a) Increase Dividends Payable and decrease Retained Earnings by $60,000 b) Increase Dividends Payable and decrease Retained Earnings by $6,000. c) Increase Dividends Payable and decrease Retained Earnings by $200,000 You MUST show your calculations: (4 points) 22. When the company registered dividends based on the date how this event will affect the accounting equation (Financial Statements-horizontal)? a) Increase Dividends Payable and decrease Retained Earnings by $60,000. b) Increase Dividends Payable and decrease Retained Earnings by $6,000. c) There is no effect because it had no impact either on assets, liabilities or capital. The cash flow will not be affected. YOU MUST show your calculations: On December 31, xxl, 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