Question

13) Wendell Company provided the following pertaining to its accounting year that ended December 31, 2016: Common stock with a $10,000 par value was sold for $44,000 cash Cash dividends totaling $21,600 were declared, of which $16,600 were paid Net income was $64,000 A 5% stock dividend resulted in a common stock distribution, which had a $5,000 par value and a $24,600 market value Treasury stock repurchased in a prior year for $10,600 was resold for $8,600 and in the journal entry to record the sale, Additional paid-in capital was debited for the amount of the difference between the repurchase price and the resale price What is the amount of the increase in Wendell’s retained earnings for the year ended December 31, 2016?

A) $22,800.

B) $19,800.

C) $37,400.

D) $17,800.

14) Wendell Company provided the following pertaining to its accounting year that ended December 31, 2016:

• Common stock with a $10,000 par value was sold for $59,000 cash
• Cash dividends totaling $20,900 were declared, of which $15,900 were paid
• Net income was $79,000
• A 5% stock dividend resulted in a common stock distribution, which had a $5,000 par value and a $23,900 market value
• Treasury stock repurchased in a prior year for $9,900 was resold for $7,900 and in the journal entry to record the sale, Additional paid-in capital was debited for the amount of the difference between the repurchase price and the resale price

What is the amount of net increase in Wendell’s additional paid-in capital account during the year 2016?

A) $77,800.

B) $24,900.

C) $67,900.

D) $65,900.

Answer 1

13
Net income	64000
Less: Cash dividends declared	-21600
Less: Stock dividends	-24600
Increase in Wendell’s retained earnings	17800
Option D is correct
14
Additional paid-in capital, Common stock	49000	=59000-10000
Additional paid-in capital from Stock dividends	18900	=23900-5000
Additional paid-in capital debited	-2000	=7900-9900
Net increase in Wendell’s additional paid-in capital account	65900
Option D is correct