Tangshan Mining Has Common Stock at Par of $200,000, Paid-In

question 28

Multiple Choice

Tangshan Mining has common stock at par of $200,000, paid-in capital in excess of par of $400,000, and retained earnings of $280,000. In states where the firm's legal capital is defined as the total of par value and paid-in capital in excess of par, the firm could pay out ________ in cash dividends without impairing its capital.

• A) $280,000
• B) $400,000
• C) $480,000
• D) $600,000

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Definitions:

Product Costs

The costs directly associated with the creation of a product, including direct materials, direct labor, and manufacturing overhead.

Work in Process

Inventory category that includes goods partially through the production process, not yet ready for sale.

Finished Goods

Products that have completed the manufacturing process and are ready for sale to customers.

Manufacturing Overhead

This includes all indirect manufacturing costs that cannot be directly attributed to specific units produced, such as utilities or salaries for factory supervisors.