Duke Corporation Reports the Following Components of Stockholders' Equity on December

question 194

Multiple Choice

Duke Corporation reports the following components of stockholders' equity on December 31,2013:
$\begin{array}{lr}\text { Common stock }-\$ 25 \text { par value, } 95,000 \text { shares authorized, } 45,000 \text { shares }\\\text { issued and outstanding } & \$ 1,125,000 \\ \text { Paid-in capital in excess of par value, common stock } &60,000 \\\text { Retained earnings } &460,000 \\ \text { Total stockholders' equity } & \$ 1,645,000\end{array}$

$\text { In 2014, the following transactions affected its stockholders equity accounts: }$

Jan. 1 Purchased 4,500 shares of its own stock at $\$ 27$ cash per share.
Jan. 5 Directors declared a $\$ 3$ per share cash dividend payable on Feb. 28 to the Feb. stockholders of record.

Feb. 28 Paid the dividend declared on January 5 .
Mar. 3 Sold 1,000 shares of treasury stock for $\$ 28$ per share
Mav 25 Sold 1,000 shares of treasulu stock for $\$ 16$ per share.
What is the amount in the Retained Earnings account immediately after the May 25 sale?

• A) $460,000
• B) $328,500
• C) $444,000
• D) $433,000
• E) $338,500

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Definitions:

Asset Balances

The valuation of an organization's resources, such as cash, investments, property, and equipment, reflected in its financial statements at a specific point in time.

Liability Balances

The outstanding obligations or debts that a company owes to third parties.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities; also known as shareholders' equity.

Cash Dividend

The allocation of a part of a company's profits to its shareholders, approved by the board of directors, and typically dispensed in the form of cash.