during discal 2016 stanley black and decker corporation reported net income of 965.3 million and paid...

during discal 2016 stanley black and decker corporation reported net income of 965.3 million and paid dividends of 330.9 million which of the following describes how these transaction would affect stanley black and decker's equity accounts

a- increase contibuted capital by 965.3 and decrease earned capital by 330.9

b- deacres contributed capital by 330.9 and increase earned capital by 965.3

c- increase contributed capital by 634.4

d- increase earned capital by 634.4

Solutions

Expert Solution

Net income and dividend would be adjusted in earned capital:

So By net income increase earned capital by $965.30 and decrease earned capital $330.90

So net effect is (965.30-330.90) = $634.40

So answer is d) Increase earned capital by $634.40

ekkarill92 answered 1 year ago

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