Table 14-3
Following Is the Shareholders' Equity Section of the Balance

question 158

Multiple Choice

Table 14-3
Following is the shareholders' equity section of the balance sheet of Monty Corporation:
$$\begin{array} { | l| r | } \hline \text { Contributed capital: } & \\\hline \text { Preferred shares, } \$ 2.50 \text {, cumulative, } 35,000 \text { shares } & \\\hline \text { authorized, } 7,000 \text { shares issued } & \$ 350,000 \\\hline \text { Common shares, } 140,000 \text { shares authorized, } & \\\hline 50,000 \text { shares issued } & 452,500 \\\hline\\\hline \text { Total contributed capital } & 802,500 \\\hline \text { Retained earnings } & 204,500 \\\hline \text { Total shareholders' equity } & \$ 1,007,000 \\\hline\end{array}$$
-Refer to Table 14-3.Assuming Monty purchases 15,000 of its common shares at $9.50 per share,total shareholders' equity is:

• A) increased $142,500
• B) decreased $142,500
• C) increased $6,750
• D) the same as it was before the purchase of the company's own shares

Identify and differentiate between diagrams of arguments and explanations based on structure.

Understand that a single hypothesis can explain multiple explananda.

Recognize the terminologies used in explanations, such as explanandum and hypothesis.

Evaluate the adequacy of hypotheses in explanations.

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Definitions:

Progressive

A tax system where the tax rate increases as the taxable amount increases, making it more burdensome for higher earners.

Excess Burden

The excess burden of a tax is the cost to society in economic welfare that exceeds the revenue raised by the government, often due to distorted market behaviors.

Perfectly Inelastic

A market condition where demand or supply does not change in response to price changes, represented by a vertical line on a graph.

Tax

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