Xanadu Manufacturing Company has total stockholders' equity of $22 billion. Retained Earnings is $24 billion. How can total stockholders' equity be less than Retained Earnings?
A) Because Retained Earnings is a deficit.
B) Because the company is going out of business.
C) Because the company has a large amount of paid-in capital.
D) Because the company has a large amount of treasury stock.
Correct Answer:
Verified
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