Question
The balance sheet of Bluesky Services included the following shareholders' equity section at December 31, 2017: Common stock ($1 par value, authorized 60 million shares,
The balance sheet of Bluesky Services included the following shareholders' equity section at December 31, 2017:
Common stock ($1 par value, authorized 60 million
shares, issued and outstanding 40 million shares) $ 40
Paid-in capital --- excess of par 200
Retained earnings 60
Total shareholders equity $300
On January 4, 2018, Bluesky purchased and retired 1 million shares for $8 million. Immediately after retirement of the shares, the balances in the paid-in capital excess of par and retained earnings accounts are:
a) Paid-in capital --- excess of par: $200M; Retained earnings: $58M | ||
b) Paid-in capital --- excess of par: $198M; Retained earnings: $55M | ||
c) Paid-in capital --- excess of par: $193M; Retained earnings: $52M | ||
d) Paid-in capital --- excess of par: $195M; Retained earnings: $58M |
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