Cyan Corp. issued 20,000 shares of $5 par common stock at
$10 per share. On December 31, year 1, Cyan?s retained earnings
were $300,000. In March year 2, Cyan reacquired 5,000 shares of
its common stock at $20 per share. In June year 2, Cyan sold
1,000 of these shares to its corporate officers for $25 per share.
Cyan uses the cost method to record treasury stock. Net income
for the year ended December 31, year 2, was $60,000. At December
31, year 2, what amount should Cyan report as retained
earnings?

$360,000
$365,000
$375,000
$380,000

Answer rating: 100% (QA)

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