Wendell Company provided the following pertaining to its recent year of operation:
Common stock with a $10,000 par value was sold for $50,000 cash.
Cash dividends totaling $20,000 were declared,of which $15,000 were paid.
Net income was $70,000.
A 5% stock dividend resulted in a common stock distribution,which had a $5,000 par value and a $23,000 market value.
Treasury stock costing $9,000 was sold for $7,000.
How much did Wendell's retained earnings increase during the recent year of operation?
A)$32,000
B)$45,000
C)$29,000
D)$27,000

Question

Wendell Company provided the following pertaining to its recent year of operation:
 Common stock with a $10,000 par value was sold for $50,000 cash.
 Cash dividends totaling $20,000 were declared,of which $15,000 were paid.
 Net income was $70,000.
 A 5% stock dividend resulted in a common stock distribution,which had a $5,000 par value and a $23,000 market value.
 Treasury stock costing $9,000 was sold for $7,000.
How much did Wendell's retained earnings increase during the recent year of operation?
A)$32,000
B)$45,000
C)$29,000
D)$27,000

Quizplus · Accepted Answer

Retained earnings increase ($27,000) = Net income ($70,000) - Cash dividends declared ($20,000) - Market value of stock dividend ($23,000)

Wendell Company Provided the Following Pertaining to Its Recent Year