Asked by
Jason Villareal
on Nov 08, 2024
Verified
XYZ Company had a net income of $40 million in 2018. The firm paid no dividends. If there were no further changes to the stockholders' equity accounts, then ____________ by $40 million.
A) Total debt must have increased.
B) Retained earnings must have increased
C) Total shareholders' equity must have decreased
D) Common stock must have decreased
E) The market value of the firm's stock must have decreased
Retained Earnings
The portion of net income that is not distributed to shareholders and is instead reinvested in the company.
Shareholders' Equity
The residual interest in the assets of a corporation after deducting liabilities, representing the owners' claim on the company's assets.
- Examine the effects of corporate transactions on equity held by shareholders and the net operating capital.
Verified Answer
DB
Learning Objectives
- Examine the effects of corporate transactions on equity held by shareholders and the net operating capital.