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NEW QUESTION: 2
What would be the effect of a lower tax rate on the ending balance of ordinary shares and on dividends said for the year?
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B. Option D
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D. Option B
Answer: A
Explanation:
The balance in the ordinary shares account represents share capital i.e. capital contributed by owners, not earnings retained in the business. It is not affected by a change in tax ate. I ./id. ends will increase. not however, because they are a constant percentage of after-tax earnings. An entity reports the following account balances at year-end:
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