A Corporation Reported the Following During 2015: Net Income $175,250;a

question 80

Multiple Choice

A corporation reported the following during 2015: Net income $175,250;a sale of 10,000 shares of $5 par value common stock for $8.75 per share;a purchase of treasury stock costing $24,750;a sale of treasury stock costing $15,500 for $14,695;a declaration and distribution of a $39,000 cash dividend;a declaration and distribution of a "small" stock dividend of 5,000 shares of $5 par value common stock at a total market value of $50,000.What was the increase in owners' equity during 2015?

• A)$213,695
• B)$188,695
• C)$198,195
• D)$173,195

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Definitions:

Liability

Liability represents an entity's financial debt or obligations that arise during the course of operations, expected to be paid or settled in the future.

Bargain Purchase Option

An option in a lease that allows the lessee to purchase the leased asset at the end of the lease term at a price significantly lower than its estimated fair market value.

Capital Lease

A lease agreement that transfers substantially all the risks and benefits of ownership to the lessee, effectively treated as a purchase by the lessee.

Unguaranteed Residual Value

The estimated future value of an asset at the end of its lease term that is not guaranteed by the lessee or a third party.