Chapter_9_Homework___Quiz_Bowl_Solutions

Chapter_9_Homework___Quiz_Bowl_Solutions - Problems-Set A...

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Problems—Set A P9-1A Sammie’s Soap Company, Inc.: Shareholders’ equity section of balance sheet Sammie’s Soap Company, Inc. Balance Sheet (Shareholders’ Equity Section) At 12/31/05 Common stock ($0.50 par, 150,000 shares authorized, 80,000 shares issued, 79,000 shares outstanding) $ 40,000 Paid-in capital in excess of par 415,000 Retained earnings 529,500 Less treasury shares at cost (1,000 shares) (6,000) Total shareholders’ equity $978,500 Common Stock – 70,000 beginning balance + 10,000 sold = 80,000 shares issued × $.50 par = $40,000 80,000 shares issued – 1,000 shares repurchased = 79,000 shares outstanding Paid-in Capital in Excess of Par = Beginning of the year balance + stock sold = End of year balance = $350,000 + [($7 – $0.50) × 10,000 shares] = $415,000 Retained Earnings = Beginning of year balance + NI – Dividends = End of year balance = $500,000 + $49,500 – ($0.25 × 80,000) = $529,500 Treasury Shares = $6 × 1,000 shares purchased = $6,000 69
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70 Chapter 9 Special Acquisitions: Financing a Business with Equity
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This note was uploaded on 05/04/2008 for the course ACCTG 211 taught by Professor Johnston during the Fall '99 term at Pennsylvania State University, University Park.

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Chapter_9_Homework___Quiz_Bowl_Solutions - Problems-Set A...

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