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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