Crawford Company Started the Year with $60,000 in Its Common

question 19

Multiple Choice

Crawford Company started the year with $60,000 in its Common Stock account and a credit balance in Retained Earnings of $44,000.During the year, the company earned net income of $48,000, and declared and paid $20,000 of dividends.In addition, the company sold additional common stock amounting to $28,000.As a result, the balance in retained earnings at the end of the year would be

• A)$160,000.
• B)$72,000.
• C)$132,000.
• D)$100,000.

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Definitions:

Recognised Borrowings

Loans and other forms of financial debt that are acknowledged on a company's balance sheet as liabilities.

Forward Exchange Contract

An agreement between two parties to exchange a specified quantity of one currency for another at a specified exchange rate on a specified future date.

Exchange Gain

Exchange gain arises when a company holds foreign currency or transactions, and the exchange rate moves in its favor, increasing the value of the foreign currency held.

Loss

A decrease in net assets or wealth, often realized when expenses exceed revenues or when assets lose value and is reflected in the financial statements.