please tell me why Q23s answer is D

Practice Ques for final exa hues for final ekin-FA , nt-rid-21004012 1/courses/2189 12135 Software Down y, UBLeams y, ~ The Libraries-Univ | | UTIO COMB/ final%20exam-FA18 Imported From IE 20. A contingent liability (e.g., law suits) is recorded by making the appropriate joumal entry if the lilk loss from a contingency is: A. Remote B. Possible C. Probable D. Negligible 21. Which statement is true concerning a corporation that pays out cash dividends? Dividends in arrears must be taken into account on noncumulative preferred stock B. A. Cash dividends increase the assets and decrease the retained earnings of a corporation C. The net income of a corporation is reduced by the amount of dividends it declares and pay D. Cash dividends become a liability of the corporation on the declaration date 22. Which of the following dividend preferences is associated with common stock? A. Cumulative-dividend preference B. Current-dividend preference C. A fixed percentage payout D. None of the above 23. A loss on the sale of treasury stock is recognized when treasury stock is sold at: A. A higher price than the stock's market value B. A higher price than the stock's cost C. A higher price then the stock's par or state value D. None of the above 24. On April 30, 2009, Trelease Company declared a dividend of $40,000. The company decided that dividend would be paid on June 15, 2009 to all shareholders of record on May 25, 2009. The jour record the declaration of the dividend on April 30 would include a: A. Credit to Dividends of $40,000 B. Debit to Dividends Payable of $40,000 C. Debit to Cash of $40,000 D. Credit to Dividends Payable of $40,000 25. Company X has net sales revenue of $780,000, cost of goods sold of $343.200, and all other exper $327,600. The net profit margin is A. 32 B. 56 C. .86 D. 14 ($780,000-$343 200-$326,600+ $109.200 net profit /$780.000 sales) 2 26. Westell Company has 12,000 shares or s.oi par common stock and 5,000 shares of $60 par, 5 noncumulative preferred stock outstanding. If the company declares cash dividends of $34,000, th