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What is the effect of this transaction on shareholder equity

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Reference no: EM133172448

Question -

Q1. Yemen reported the ff. account balance at the beginning of the year 2021:

Ordinary Share Capital, 5 par 8,200,000

Share Premium 3,323,000

Retained Earnings 4,770,000

Treasury Shares, 60,000 Shares 840,000

During the year, 40,000 treasury shares were reissued at 18 per share. What is the effect of this transaction on the shareholder's equity of the company?

a. Answer not among the choices

b. Increase by 720,000

c. Increase by 560,000

d. No Effect

e. Increase by 160,000

Q2. On June 16, 2017, Italy Inc. acquired a machine for 1,600,000 and was depreciated using the straight-line- method at a useful life of 10 years and a salvage value of 200,000. In 2022, the company changed its depreciation method to the sum of year digits. It was also determined that the remaining useful life of the asset is 5 years after which, this machine could be sold for 100,000. On December 31, 2022; the accumulated depreciation of the machine would have a balance of?

a. 927,777.78

b. 961,111.11

c. 920,000.00

d. Answer not among the choices

e. 953,333.33

Reference no: EM133172448

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