Mgmt 200 Assignment Soln 4-14-10

Mgmt 200 Assignment Soln 4-14-10 - Additional Paid-in...

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Management 200 – Introductory Financial Accounting– Spring 2010 Krannert School of Management - Purdue University Solutions to class assignment for April 14, 2010 Exercise 11-5 Treasury Stock 1a. July 1 Treasury Stock (2,000 X $20) 40,000 Cash 40,000 b. Aug. 1 Treasury Stock (400 X $18) 7,200 Cash 7,200 2. Resale price of treasury stock (2,400 X $28) $ 67,200 Less: Cost of treasury stock ($40,000 + $7,200) 47,200 Excess of selling price over cost $ 20,000 This “excess,” or “gain,” is shown on the balance sheet as an increase in the
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Unformatted text preview: Additional Paid-in Capital—Treasury Stock account. Exercise 11-8 Cash Dividends 1 . Preferred: $200,000 × 8% = $16,000 Common: $100,000 – $16,000 = $84,000 2. July 1 Retained earnings 100,000 Dividends payable 100,000 August 1 Dividends payable 100,000 Cash 100,000 3. Preferred: $16,000 × 3 years = $48,000 Common: $100,000 – $48,000 = $52,000...
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