During 2017, half of the treasury stock was resold for $264,000; net income was $720,000; cash dividends declared were $1,620,000; and stock dividends declared were $620,000. The 2017 sale of half of the treasury stock would:
Reduce retained earnings by $96,000
Reduce retained earnings by $64,000
Increase total shareholders' equity by $360,000
Reduce income before tax by $96,000

Magic realm, inc., has developed a new fantasy board game. the company sold 15,000 games last year at a selling price of $20 per game. fixed expenses associated with the game total $182,000 per year, and variable expenses are $6 per game. production of the game is entrusted to a printing contractor. variable expenses consist mostly of payments to this contractor.required: 1-a. prepare a contribution format income statement for the game last year.1-b. compute the degree of operating leverage.2. management is confident that the company can sell 58,880 games next year (an increase of 12,880 games, or 28%, over last year). given this assumption: a. what is the expected percentage increase in net operating income for next year? b. what is the expected amount of net operating income for next year? (do not prepare an income statement; use the degree of operating leverage to compute your answer.)