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Use the following information for next 10 questions. On March 1, 2009, the Miranda Company purchased 2,000 shares of its common stock for $25 per
Use the following information for next 10 questions.
On March 1, 2009, the Miranda Company purchased 2,000 shares of its common stock for $25 per share for the treasury. On July 1, 2009, 1,000 of the treasury shares were sold for $30 per share. On October 1, 2009, 1,000 of the treasury shares were sold at $15 per share.
On January 1, 2009, Mirandas balance in Retained Earnings was $100,000. During the year, the company had net income of $20,000 and paid dividends of $5,000.
- Which of the following is true regarding the purchase of stock on March 1?
- Treasury stock decreased and Total Equity decreased
- Treasury stock decreased and Total Equity increased
- Treasury stock increased and Total Equity decreased
- Treasury stock increased and Total Equity increased
- None of the above
- Refer to question #8. By what amount did Treasury Stock change, if at all? (If the account balance or amount did not change, state your answer as $0.)
- Refer to question #8. By what amount did Total Equity change, if at all? (If the account balance or amount did not change, state your answer as $0.)
- Which of the following is true regarding the sale of treasury stock on July 1?
- Treasury stock decreased and Total Equity decreased
- Treasury stock decreased and Total Equity increased
- Treasury stock increased and Total Equity decreased
- Treasury stock increased and Total Equity increased
- None of the above
- Refer to question #11. By what amount did Treasury Stock change, if at all? (If the account balance or amount did not change, state your answer as $0.)
- Refer to question #11. By what amount did Total Equity change, if at all? (If the account balance or amount did not change, state your answer as $0.)
- Which of the following is true regarding the sale of treasury stock on October 1?
- Treasury stock decreased and Total Equity decreased
- Treasury stock decreased and Total Equity increased
- Treasury stock increased and Total Equity decreased
- Treasury stock increased and Total Equity increased
- None of the above
- Refer to question #14. By what amount did Treasury Stock change, if at all? (If the account balance or amount did not change, state your answer as $0.)
- Refer to question #14. By what amount did Total Equity change, if at all? (If the account balance or amount did not change, state your answer as $0.)
- What is the balance in Retained Earnings at the end of the year?
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