As of December 31, 2018, Warner Corporation Reported the Following

Multiple Choice

As of December 31, 2018, Warner Corporation reported the following: During 2019, half of the treasury stock was resold for $240,000; net income was $600,000; cash dividends declared were $1,500,000; and stock dividends declared were $500,000.
-The 2019 sale of half of the treasury stock would:

A) Reduce income before tax by $60,000.
B) Reduce retained earnings by $60,000.
C) Increase total shareholders' equity by $300,000.
D) Reduce retained earnings by $40,000.