Refer to the Following Information for Tangent Corporation: • Common

question 102

Multiple Choice

Refer to the following information for Tangent Corporation: • Common stock, $1.00 par, 100,000 issued, 95,000 outstanding
• Paid-In capital in excess of Par-Common: $2,150,000
• Retained earnings: $910,000
• Treasury stock: 5,000 shares purchased at $20 per share
If Tangent resold 1,200 shares of treasury stock for $14.5 per share, which of the following statements would be true?

• A)The Treasury Stock account would go down by $12,000.
• B)The Paid-In Capital in Excess of Par-Common account would go up by $1,200.
• C)The Treasury Stock account would go down by $24.000.
• D)The Retained Earnings account would go up by $17,400.

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Definitions:

Tax

a financial charge or other levy imposed upon a taxpayer by a governmental organization in order to fund public expenditures.

Tax Avoidance

The legal practice of arranging one's financial affairs to minimize tax liability within the law.

Tax Evasion

The illegal practice of not paying taxes by individuals or corporations through various methods, including underreporting income.

Legal

Pertains to the system of rules that a particular country or community recognizes as regulating the actions of its members and may enforce by the imposition of penalties.