Basic Solutions Company Reported Net Earnings of $60,000, Declared and Paid

Short Answer

Basic Solutions Company reported net earnings of $60,000, declared and paid cash dividends on its common stock in the amount of $40,000 during the year, and sold 3,000 shares of $2 par value common stock for $15 per share during the year.What effects would these transactions have on the stockholders' equity accounts shown below? ​ $\begin{array}{ll}&\text { Retained Earnings}&\text {Common Stock }\\a.&\text { increase } & \text { increase } \\b.&\text { increase } & \text { decrease } \\c.&\text { decrease } & \text { increase } \\d.&\text { decrease } & \text { decrease }\end{array}$