Please Refer to the Following Information for Peartree Company

question 96

Multiple Choice

Please refer to the following information for Peartree Company: If Peartree resold 1,000 shares of treasury stock for $24 per share, what amounts would be shown for number of shares issued and outstanding?

• A)100,000 issued; 96,000 outstanding
• B)100,000 issued; 94,000 outstanding
• C)101,000 issued; 96,000 outstanding
• D)95,000 issued; 94,000 outstanding

Understand the accounting for and effects of restrictions/appropriations of retained earnings.

Distinguish between public and private corporations based on stock characteristics.

Grasp the effects of correcting errors on retained earnings and how to calculate year-end balances.

Know the main sources of stockholders' equity and the primary purpose of stock splits.

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), representing the profit a company generates from its core operations.

Income Tax Expense

The amount of money that an individual or corporation owes to the government based on their taxable income.

Effective Income Tax Rate

The average rate at which an individual or corporation is taxed, calculated by dividing the total tax expense by the taxable income.

Cash Dividends

Payments made by a corporation to its shareholders as a distribution of profits, typically in the form of cash.