question archive A company reported the following stockholder's equity on January 1 of the current year: Common stock, $10 par, 1,000,000 shares authorized, 400,000 shares issued $4,000,000 Paid-in capital in excess of par, common 1,200,000 Retained earnings 1,600,000 Total stockholders’ equity $6,800,000 Prepare journal entries for the following selected transactions related this company's stock during the current year: Mar
A company reported the following stockholder's equity on January 1 of the current year: Common stock, $10 par, 1,000,000 shares authorized, 400,000 shares issued $4,000,000 Paid-in capital in excess of par, common 1,200,000 Retained earnings 1,600,000 Total stockholders’ equity $6,800,000 Prepare journal entries for the following selected transactions related this company's stock during the current year: Mar
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A company reported the following stockholder's equity on January 1 of the current year:
|
Common stock, $10 par, 1,000,000 shares authorized, 400,000 shares issued |
$4,000,000 |
|
Paid-in capital in excess of par, common |
1,200,000 |
|
Retained earnings |
1,600,000 |
|
Total stockholders’ equity |
$6,800,000 |
Prepare journal entries for the following selected transactions related this company's stock during the current year:
|
Mar. 1 |
Purchased 10,000 shares of treasury stock for $17 per share. |
|
May 5 |
Sold 4,000 shares of treasury stock for $16 per share. |
|
Oct. 12 |
Sold 2,000 shares of treasury stock for $18 per share. |
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Answer:
Mar 1: Purchased 10,000 shares of treasury stock for $17 per share.
| Debit | Credit | |
|---|---|---|
| Treasury Stock (10,000 shares * $17 per share) | $170,000 | |
| Cash | $170,000 |
Accordingly, the Total stockholders equity will be $6,800,000 - $170,000 = $6,630,000
| Common stock, $10 par, 1,000,000 shares authorized, 400,000 shares issued | $4,000,000 |
| Paid-in capital in excess of par, common | 1,200,000 |
| Retained earnings | 1,600,000 |
| Total stockholders’ equity | $6,800,000 |
| Less: Treasury Stock (10,000 * $17 per share) | -170,000 |
| Total Stockholders Equity | $6,630,000 |
May 5: Sold 4,000 shares of treasury stock for $16 per share. (so a loss)
| Debit | Credit | |
|---|---|---|
| Cash (4000 shares * $16 per share) | $64,000 | |
| Paid-in capital - Treasury Stock - Loss (4000 shares *$1 per share) | $4,000 | |
| Treasury Stock (at cost) - (at $17 per share) | $68,000 |
Accordingly,
| Common stock, $10 par, 1,000,000 shares authorized, 400,000 shares issued | $4,000,000 |
| Paid-in capital in excess of par, common | 1,200,000 |
| Retained earnings | 1,600,000 |
| Paid-in capital from Treasury stock loss | -4,000 |
| Total stockholders’ equity | $6,796,000 |
| Less: Treasury Stock (6,000 * $17 per share) | -102,000 |
| Total Stockholders Equity | $6,694,000 |
Oct 12: Sold 2,000 shares of treasury stock for $18 per share.
| Debit | Credit | |
|---|---|---|
| Cash (2000 shares * $18 per share) | $36,000 | |
| Paid-in capital - Treasury Stock - Gain (2000 shares *$1 per share) | $2,000 | |
| Treasury Stock (at cost) - (at $17 per share) | $34,000 |
Accordingly,
| Common stock, $10 par, 1,000,000 shares authorized, 400,000 shares issued | $4,000,000 |
| Paid-in capital in excess of par, common | 1,200,000 |
| Retained earnings | 1,600,000 |
| Paid-in capital from Treasury stock loss (net) | -2,000 |
| Total stockholders’ equity | $6,798,000 |
| Less: Treasury Stock (4,000 * $17 per share) | -68,000 |
| Total Stockholders Equity | $6,730,000 |
