d The balance of the Common Stock account is 2080000 1 2080000 shares 2080000

# D the balance of the common stock account is 2080000

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(d)The balance of the Common Stock account is \$2,080,000; (\$1 ×2,080,000 shares = \$2,080,000). (sh. iss. ×par val./sh.)(e)The balance of the Treasury Stock account is \$2,000,000; (\$25 ×80,000 shares = \$2,000,000). (Trea. sh. ×cost/sh.)Ex. 226The following items were shown on the balance sheet of Martin Corporation on December 31,2017:Stockholders’ EquityPaid-In CapitalCapital StockCommon stock, \$5 par value, 750,000 sharesauthorized; ______ shares issued and ______ outstanding ........................\$3,000,000Additional paid-in capitalIn excess of par value ............................................................................180,000Total paid-in capital ..........................................................................3,180,000Retained Earnings .............................................................................................500,000Total paid-in capital and retained earnings .............................................3,680,000Less: Treasury stock (20,000 shares) ...............................................................280,000Total stockholders’ equity .......................................................................\$3,400,000InstructionsComplete the following statements and show your computations.(a)The number of shares of common stock issued was _______________.(b)The number of shares of common stock outstanding was ____________.(c)The total sales price of the common stock when issued was \$____________.(d)How much did the treasury stock cost per share? \$_______________(e)What was the average issue price of the common stock? \$______________Ans: N/A, LO: 2, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC:Problem Solving, IMA: Reporting
Solution 226(10–15 min.)(a)The number of shares of common stock issued was 600,000. (Com. st. amount/PV/sh.)\$3,000,000 ÷ \$5 par value = 600,000 shares issued.(b)The number of shares of common stock outstanding was 580,000. (Sh. iss. – Trea. sh.)600,000 issued less 20,000 in treasury = 580,000 shares outstanding(c)The total sales price of the common stock when issued was \$3,180,000.Common stock\$3,000,000Plus: In excess of par value180,000Total\$3,180,000(Tot. paid-in cap.)(d)How much did the treasury stock cost per share? \$14\$280,000 ÷ 20,000 = \$14 per share. (Trea. st. amount/Trea. sh.)(e)What was the average issue price of the common stock? \$5.30(Tot. paid-in cap ÷ sh. iss.)\$3,180,000 ÷ 600,000 shares = \$5.30 per share.Ex. 227Miles Co. had these transactions during the current period.June12Issued 50,000 shares of \$3 stated value common stock for cash of \$250,000.July11Issued 2,000 shares of \$100 par value preferred stock for cash at \$108 pershare.Nov.28Purchased 2,000 shares of treasury stock for \$10,000.InstructionsPrepare the journal entries for the preceding transactions.Ans: N/A, LO: 2, 3, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Measurement, AICPAPC: Problem Solving, IMA: FSASolution 227(5 min.)June 12Cash..............................................................................250,000Common Stock (50,000 \$3)...............................150,000Paid-in Capital in Excess of StatedValue—Common Stock......................................100,000**(Sell. pr. – (sh. iss. SV/sh.))July11Cash (2,000 \$108).....................................................216,000Preferred Stock (2,000 \$100)............................200,000Paid-in Capital in Excess of ParValue—Preferred Stock......................................16,000*(2,000 \$8)*(Sell. pr./sh. – PV/sh.) sh. iss.Nov.28Treasury Stock...............................................................10,000Cash......................................................................10,000
Ex. 228On January 1, 2017, Browning Corporation had 75,000 shares of \$1 par value common stockissued and outstanding. During the year, the following transactions occurred:Mar.1Issued 90,000 shares of common stock for \$675,000June1Declared a cash dividend of \$2.00 per share to stockholders of record on June 15June30Paid the \$2.00 cash dividendDec.1Purchased 5,000 shares of common stock for the treasury for \$18 per shareDec.15Declared a cash dividend on outstanding shares of \$2.50 per share to stockholdersof record on December 31