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# Ch10a - Chapter 10 Stockholders Equity Exercise 10-9...

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Chapter 10 - Stockholders’ Equity 10-1 Exercise 10-9 Required: Record each of these transactions. March 1, 2012 Debit Credit Cash (55,000 x \$52) 2,860,000 Common Stock (55,000 x \$1) 55,000 Additional Paid-in Capital (difference) 2,805,000 (Issue common stock above par) May 10, 2012 Treasury Stock (5,000 shares x \$55) 275,000 Cash 275,000 (Purchase treasury stock) June 1, 2012 Dividends (150,000 shares x \$1.50) 225,000 Dividends Payable 225,000 (Declare cash dividends) July 1, 2012 Dividends Payable (150,000 shares x \$1.50) 225,000 Cash 225,000

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Chapter 10 - Stockholders’ Equity 10-2 (Pay cash dividends) October 21, 2012 Cash (2,500 shares x \$60) 150,000 Treasury Stock (2,500 shares x \$55) 137,500 Additional Paid-in Capital (2,500 x \$5) (Reissue treasury stock) 12,500 Exercise 10-10 Required: Taking into consideration all of the transactions recorded in E10-9 , prepare the stockholders' equity section of the balance sheet for Power Drive Corporation as of December 31, 2012. Power Drive Corporation Balance Sheet (Stockholders’ Equity Section) December 31, 2012 Stockholders’ equity: Common stock, \$1.00 par value \$ 155,000 Additional paid-in capital 7,317,500 Total paid-in capital 7,472,500 Retained earnings 2,375,000 * Treasury stock, 2,500 shares (137,500) Total stockholders’ equity \$9,710,000 * \$2,000,000+\$600,000-\$225,000
Chapter 10 - Stockholders’ Equity 10-3 Exercise 10-14 Requirement 1: Calculate the return on equity in 2009. Compare it with the amount calculated forDeckers Outdoor and Timberland in the chapter. (\$ in millions) Net Income ÷ Average Stockholders’ Equity = Return on Equity Limited Brands \$220 ÷ (\$2,219 + 1,874) / 2 = 10.8% Limited Brands has a lower return on equity than Deckers Outdoor, but a higher return on equity than Timberland.

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Ch10a - Chapter 10 Stockholders Equity Exercise 10-9...

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