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

question 87

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. 5 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.
May 25 Sold 1,000 shares of treasury stock for $\$ 16$ per share.
June 15 Directors declared a $\$ 1.50$ per share cash dividend payable on July 15 to the June 30 stockholders of record.

July 15 Paid the dividend declared on June 15 .

What is the amount in the Retained Earnings account immediately after the dividend on July 15?

• A) $264,750
• B) $392,500
• C) $460,000
• D) $338,500
• E) $470,000

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Definitions:

Balance Sheet Accounts

Accounts displayed on the balance sheet that represent the company's assets, liabilities, and equity at a point in time.

Operating Activities

Business actions directly related to the production and delivery of goods and services, affecting cash flows from operations.

Indirect Method

A cash flow statement preparation approach that adjusts net income for changes in non-cash accounts to calculate cash flow from operating activities.

Cash Flows

The overall volume of cash inflows and outflows within a corporation, impacting its availability of liquid funds.