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

question 80

Multiple Choice

Table 14-3
Following is the shareholders' equity section of the balance sheet of Monty Corporation:
$$\begin{array} { | l| r | } \hline \text { Contributed capital: } & \\\hline \text { Preferred shares, } \$ 2.50 \text {, cumulative, } 35,000 \text { shares } & \\\hline \text { authorized, } 7,000 \text { shares issued } & \$ 350,000 \\\hline \text { Common shares, } 140,000 \text { shares authorized, } & \\\hline 50,000 \text { shares issued } & 452,500 \\\hline\\\hline \text { Total contributed capital } & 802,500 \\\hline \text { Retained earnings } & 204,500 \\\hline \text { Total shareholders' equity } & \$ 1,007,000 \\\hline\end{array}$$
-The sale of a corporation's repurchased shares:

• A) has no effect on its net income
• B) may result in a gain or loss that will affect its net income
• C) will increase or decrease the retained earnings account
• D) will increase or decrease the contributed surplus account

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