Practice Question Answer

Practice Question Answer - APIC, Common Stock $ 25,000 ii....

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Chapter 11 Stockholders’ Equity ( Extra Credit Practice ) Answer Key On January 1, 2000, the accounts of X Corporation showed the following : Common Stock, par $ 2, authorized 100,000 shares $ 50,000 Additional Paid In capital 100,000 Retained Earnings 20,000 Net Income for 2000 was $ 15,000 During 2000, the following transactions affecting stockholders’equity occurred in the order given : i. issued a 10 % stock dividend. Market value of the stock on that day was $ 12 /share ii. purchased treasury shares, 500 shares for $ 5,000 @ $ 10 /share iii. resold 400 shares of the treasury shares purchased earlier at $ 15/share A. Prepare journal entries for (i) to (iv) in the space provided below : i. Retained earnings $ 30,000 ( 0.10 x 25,000 o/s shares x $ 12/sh ) Common Stock @ par $ 5,000 ( 2500 shares x $2 )
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Unformatted text preview: APIC, Common Stock $ 25,000 ii. Treasury Stock $ 5,000 ( 500 sh x $ 10/sh ) Cash $ 5,000 iii. Cash $ 6,000 ( 400 sh x $ 15/sh ) Treasury Stock $ 4,000 ( 400 x $ 10/sh @ cost ) APIC, Treasury Stock $ 2,000 B. Complete the blanks for the StockholdersEquity section of Y Companys balance sheet @ 12/31/00 Common Stock, par $ 2, authorized shares 100,000, shares issued 27,500 shares outstanding, 27,400 $ 55,000 ( # sh issued x par ) Additional paid-in capital, common stock $ 125,000 ($100,00 + 25,000 ) Additional paid-in capital, treasury stock $ 2,000 ( see iii ) Total Paid In Capital $ 182,000 Retained Earnings ( Beg. $ 20,000 + NI 15,000 div 30,000) $ 5,000 Treasury Stock, shares 100 ( $ 1,000 ) Total StockholdersEquity $ 186,000 ============...
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