E8-10B. Analyze equity accounts(.L O 1,2,3,5)
The following balances were shown on the year-end balance sheets for 2007 and 2008 for High Note Publishing Company. For each item, give the most likely reason for the change from one year to the next.
| 12/31/07 | 12/31/08 | Explanation | |
| Common stock | $ 35,000 | $43,000 | |
| Paid- in capital | $115.000 | 155,000 | |
| Retained earnings | $142,000 | *$160,500 | |
| Treasury stock | $ (2,125) | $ (2,625) |
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