C is corrent. Retained earnings is increased by income and decreased by dividends. Donated assets are recorded at FV upon receipt and recognized as revenue in the period of donation. Trading securities are measured at fair value at the end of the year, and the unrealized is included in net income.
| Retained earnings |
= |
Income |
− |
Cash dividends |
− |
Stock dividends |
| $520,000 |
= |
$840,000 |
− |
$260,000 |
− |
$60,000 |
The excess of proceeds over cost of treasury stock sold would be credited to paid-in capital.
A is incorrect. Retained earnings is increased by income and decreased by dividends. Donated assets are recorded at FV upon receipt and recognized as revenue in the period of donation. Trading securities are measured at fair value at the end of the year, and the unrealized is included in net income.
| Retained earnings |
= |
Income |
− |
Cash dividends |
− |
Stock dividends |
| $520,000 |
= |
$840,000 |
− |
$260,000 |
− |
$60,000 |
The excess of proceeds over cost of treasury stock sold would be credited to paid-in capital.
B is incorrect. Retained earnings is increased by income and decreased by dividends. Donated assets are recorded at FV upon receipt and recognized as revenue in the period of donation. Trading securities are measured at fair value at the end of the year, and the unrealized is included in net income.
| Retained earnings |
= |
Income |
− |
Cash dividends |
− |
Stock dividends |
| $520,000 |
= |
$840,000 |
− |
$260,000 |
− |
$60,000 |
The excess of proceeds over cost of treasury stock sold would be credited to paid-in capital.
D is incorrect. Retained earnings is increased by income and decreased by dividends. Donated assets are recorded at FV upon receipt and recognized as revenue in the period of donation. Trading securities are measured at fair value at the end of the year, and the unrealized is included in net income.
| Retained earnings |
= |
Income |
− |
Cash dividends |
− |
Stock dividends |
| $520,000 |
= |
$840,000 |
− |
$260,000 |
− |
$60,000 |
The excess of proceeds over cost of treasury stock sold would be credited to paid-in capital.
