act124ch18answers

act124ch18answers - E 18-4 Issuance of shares; noncash...

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E 18-4 Issuance of shares; noncash consideration LO3 During its first year of operations, Eastern Data Links Corporation entered into the following transactions relating to shareholders’ equity. The articles of incorporation authorized the issue of 8.5 million common shares, $1.5 par per share, and 2 million preferred shares, $54 par per share. Required: Prepare the appropriate journal entries to record each transaction. Round all answers to the nearest whole number. Feb. 12 Sold 2.6 million common shares, for $6.4 per share. 13 Issued 43,000 common shares to attorneys in exchange for legal services. 13 Sold 83,000 of its common shares and 7,000 preferred shares for $937,000. Nov. 15 Issued 399,000 of its common shares in exchange for equipment for which the cash price was known to be $3,688,000. February 12 Cash 16,640,000 Common Stock 3,900,000 Paid-In Capital - Excess of Par 12,740,000 February 13 Legal Expense 275,200 Common Stock 64,500 Paid-In Capital - Excess of Par 210,700 February 13 Cash 937,000 Common Stock 124,500 Paid-In Capital - Excess of Par, Common 406,700 Preferred Stock 378,000 Paid-In Capital - Excess of Par, Preferred 27,800 November 15 Property, Plant and Equipment 3,688,000 Common Stock 598,500 Paid-In Capital - Excess of Par 3,089,500 E 18-9 Treasury stock LO5 In 2006, Western Transport Company entered into the treasury stock transactions described below. In 2004, Western Transport had issued 144 million shares of its $1.75 par common stock at $20 per share.
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Required: Prepare the appropriate journal entry for each of the following transactions: 1. On January 23, 2006, Western Transport reacquired 15 million shares at $20 per share. 2. On September 3, 2006, Western Transport sold 2 million treasury shares at $21 per share. 3. On November 4, 2006, Western Transport sold 2 million treasury shares at $18 per share. Enter numbers in millions. Round all answers to the nearest whole number. 1. January 23, 2006 Treasury Stock 300 Cash 300 2. September 3, 2006 Cash 42 Treasury Stock 40 Paid-In Capital - Share Repurchase 2 3. November 4, 2006 Cash 36 Paid-In Capital - Share Repurchase 2 Retained Earnings 2 Treasury Stock 40 E 18-10 Treasury stock; weighted-average and FIFO cost LO5 At December 31, 2005, the balance sheet of Meca International included the following shareholders equity accounts: Shareholders’ Equity ($ in millions) Common stock, 60 million shares at $1 par $ 60 Paid-in capital - excess of par 300 Retained earnings 410 Required: Assuming that Meca International views its share buybacks as treasury stock, record the appropriate journal entry for each of the following transactions: 1. On February 12, 2006, Meca reacquired 1 million common shares at $13 per share. 2.
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This homework help was uploaded on 04/10/2008 for the course ACT 123 taught by Professor Venuti during the Fall '07 term at Hofstra University.

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act124ch18answers - E 18-4 Issuance of shares; noncash...

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