What the company must when a company wishes to purchase

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Problem 1: The Retained Earnings account balance for a large corporation is $10,000,000. This amount represents

a. the amount of cash available for dividends.
b. earnings that have not been distributed to shareholders.
c. revenues for all past years of operations.
d. cash in the bank.

Problem 2: When a company wishes to purchase and retire its own stock, the company must

a. get the approval of the state to do so.
b. decrease the Stock account balances by the original issue price.
c. issue a different class of stock to the former stockholders.
d. record a gain or loss depending on the difference between the original selling price and the repurchase cost.

Reference no: EM132826464

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