Based on the Following Summary of Shareholders' Equity Accounts, Answer

question 1

Essay

Based on the following summary of shareholders' equity accounts, answer the following questions.No dividends were paid during the Year 1 and Year 2.
$\begin{array}{lll}& \text {December 31 , Year 1 }& \text {December 31, Year 2 }\\\text { Common stock, } \$ 5 \text { par value } & \$ 1,000,000 & \$ 1,250,000 \\\text { Additional paid-in capital } & 1,500,000 & 2,000,000 \\\text { Net unrealized loss on investment } & &\\\text { in marketable equity securities } & (100,000) & (150,000) \\\text { Retained earnings } & 2,000,000 & 2,500,000 \\\text { Less: Cost of treasury shares } & (200.000) & (224,000)\\\text { Total shareholders' equity } & \$ 4.200 .000 & \$ 5.376 .000\end{array}$
a. What is net income during Year 2?
b. How many additional common shares were issued in Year 2?
c. What was the cost per share of the treasury stock acquired during Year 2? 2,000 additional shares were acquired during the year.
d. What price was paid for the additional common shares issued in Year 2?
e. What happened to the portfolio of long-term marketable equity securities?

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Definitions:

Own Interest

Refers to the personal gain or benefit that individuals or organizations seek in various activities or decisions.

Production Process

The Production Process involves the methods and sequences of activities used to transform inputs into finished goods or services.

Capital

Financial assets or physical resources that are used by businesses to produce goods and services and generate wealth.

Rich

Having a large amount of wealth or resources, enabling a higher standard of living and purchasing power.