Final answer:
The unexplained decrease in retained earnings by 10 million, matching the increase in common stock and paid-in capital, suggests the company issued new shares and then used proceeds to cover expenses or pay dividends.
Step-by-step explanation:
When Kunze's common stock and paid-in capital accounts increased by a total of 10 million, and there is an unexplained decrease in retained earnings of the same amount, it typically signals a transaction where the company issued new shares. The proceeds from the issuing of new shares, which are reflected in the common stock and paid-in capital accounts, would often be retained within the company. However, if the retained earnings decreased by an equivalent amount and there's no other information given, this might imply that the funds raised from the sale of stock were used to cover expenses or distributed as dividends, causing the retained earnings to decrease accordingly.