Wheeler Corporation had retained earnings as of 12/31/10 of $15 millio

Wheeler Corporation had retained earnings as of 12/31/10 of $15 million. During 2011, Wheeler’s
net income was $7 million. The retained earnings balance at the end of 2011 was equal to $20
million. Therefore,

A) Wheeler paid a dividend in 2010 of $5 million.
B) Wheeler purchased treasury stock in 2010 for $2 million.
C) Wheeler paid a dividend in 2010 of $2 million.
D) Wheeler sold common stock during 2010 for $5 million.

ANSWER

C