Wendell Company Provided the Following Pertaining to Its Recent Year

question 93

Multiple Choice

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

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Definitions:

Cost of Goods Manufactured

The total production cost of goods that were completed during a specific accounting period.

Flow of Costs

Describes the movement of costs from inventory to the cost of goods sold in accounting.

Manufacturing Accounts

Financial statements that reflect the costs and revenue associated with the manufacturing process of a company.

Process Costing

A costing method used where similar items are produced in a continuous manufacturing environment, assigning costs based on the process they go through.