The transactions listed below relate to Wainwright Inc. You are to assume that on the date on which each of the transactions occurred,

the corporation's accounts showed only common stock

$($

$$$

$1$

$0$

$0$

$$par

$)$

$$outstanding$,$ a current ratio of

$2$

$.$

$7$

:

$1$

$,$

$$and a substantial net income

for the year to date

$($

before giving effect to the transaction concerned

$)$

$.$

$$On that date, the book value per share of stock was $

$1$

$5$

$1$

$.$

$5$

$3$

$.$

Each numbered transaction is to be considered completely independent of the others, and its related answer should be based on the

effect

$($

s

$)$

$$of that transaction alone. Assume that all numbered transactions occurred during

$2$

$0$

$2$

$6$

$$and that the amount involved in each

case is sufficiently material to distort reported net income if improperly included in the determination of net income. Assume further

that each transaction was recorded in accordance with generally accepted accounting principles and, where applicable, in conformity

with the all

$-$

inclusive concept of the income statement.

Select as many options as you deem appropriate to reflect the effect

$($

s

$)$

$$of each transaction as of the date of the transaction.Litigation involving Wainwright Inc. as defendant was settled in the corporation's favor, with the plaintiff paying all court costs and

legal fees. In $2023,$ the corporation had appropriately established a special short$-$tem liability for this court action. $($Indicate the

effect of reversing the contingency only.$)$

Increased the corporation's $2026$ net income.

Decreased the corporation's $2026$ net income.

Increased the corporation's total retained earnings directly $($i$.$e$.,$ not via net income$).$

Decreased the corporation's total retained earnings directly.

Increased the corporation's current ratio.

Decreased the corporation's current ratio.

Increased each stockholder's proportionate share of total stockholders' equity.

Decreased each stockholder's proportionate share of total stockholders' equity.

Increased each stockholder's equity per share of stock $($book value$).$

Decreased each stockholder's equity per share of stock $($book value$).$

Had none of the foregoing effects.

The corporation received a check for the proceeds of an insurance policy from the company with which it is insured against theft

of trucks. No entries concerning the theft had been made previously, and the proceeds reduce but do not cover completely the

loss.

Increased the corporation's $2026$ net income.

Decreased the corporation's $2026$ net income.

Increased the corporation's total retained earnings directly $($i$.$e$.,$ not via net income$).$

Decreased the corporation's total retained earnings directly.

Increased the corporation's current ratio.

Decreased the corporation's current ratio.

Increased each stockholder's proportionate share of total stockholders' equity.

Decreased each stockholder's proportionate share of total stockholders' equity.

Increased each stockholder's equity per share of stock $($book value$).$

Decreased each stockholder's equity per share of stock $($book value$).$

Had none of the foregoing effects.

Treasury stock, which had been repurchased at and carried at $$127$ per share, was issued as a stock dividend. In connection with

this distribution, the board of directors of Wainwright Inc. had authorized a transfer from retained earnings to permanent capital

of an amount equal to the aggregate market value $($ $$153$ per share$)$ of the shares issued. No entries relating to this dividend had

been made previously.

Increased the corporation's $2026$ net income.

Decreased the corporation's $2026$ net income.

Increased the corporation's total retained earnings directly $($i$.$e$.,$ not via net income$).$

Decreased the corporation's total retained earnings directly.

Increased the corporation's current ratio.

Decreased the corporation's current ratio.

Increased each stockholder's proportionate share of total stockholders' equity.

Decreased each stockholder's proportionate share of total stockholders' equity.

Increased each stockholder's equity per share of stock $($book value$).$

Decreased each stockholder's equity per share of stock $($book value$).$

Had none of the foregoing effects.