Statement of Stockholders' Equity
At the end of 2019, Stanley Utilities Inc. had the following equity accounts and balances:
During 2020, Stanley Utilities engaged in the following transactions involving its equity accounts:
Required:
Concept introduction:
Treasury stock:
Treasury stock is the shares bought back by the company itself. A company may purchase its own shares and the shares bought back are called treasury stock. The journal entries are made at the time of sale and purchase of treasury stock as follows:
Treasury stock account is debited and cash account is credited with the cost of treasury stock purchased.
Cash account is debited for the amount received on sale of treasury stock and the Treasury stock account is credited with the cost of treasury stock. For the difference in cost and sale value, Additional Paid in Capital and Retained earnings accounts are adjusted.
Requirement 1:
To prepare:
The Journal entries for the given transactions.
The Journal entries for the given transactions are explained as follows:
Journal Entries | ||||
# | Account Titles | Debit | Credit | |
a. | Cash (3300 Shares @ $15) | $49,500 | ||
Common Stock (3300 Shares @ $1) | $3,300 | |||
Paid in Capital In excess of Par- Common Stock | $ 46,200 | |||
(Being Common Stock sold for cash) | ||||
b. | Cash (1000 Shares @ $105) | $ 105,000 | ||
Preferred Stock (1000 Shares @ $100) | $ 100,000 | |||
Paid in Capital In excess of Par- Preferred Stock | $5,000 | |||
(Being Preferred Stock sold for cash) | ||||
c... |
Concept introduction:
Treasury stock:
Treasury stock is the shares bought back by the company itself. A company may purchase its own shares and the shares bought back are called treasury stock. The journal entries are made at the time of sale and purchase of treasury stock as follows:
Treasury stock account is debited and cash account is credited with the cost of treasury stock purchased.
Cash account is debited for the amount received on sale of treasury stock and the Treasury stock account is credited with the cost of treasury stock. For the difference in cost and sale value, Additional Paid in Capital and Retained earnings accounts are adjusted.
Requirement 2:
To prepare:
The Stockholder’s Equity Section.
Accounting Information Systems
Financial & Managerial Accounting
Corporate Financial Accounting
Principles of Macroeconomics (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
Essentials of Business Communication (MindTap Course List)
Foundations of Business (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
Probability and Statistics for Engineering and the Sciences
STATISTICS F/BUSINESS+ECONOMICS-TEXT
Fundamentals of Financial Management (MindTap Course List)
Principles of Economics (MindTap Course List)
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Financial And Managerial Accounting
A Guide to SQL
Principles of Information Security (MindTap Course List)
Database Systems: Design, Implementation, & Management
Fundamentals of Information Systems
Database Systems: Design, Implementation, & Management
Principles of Information Systems (MindTap Course List)
Fundamentals of Information Systems
Precision Machining Technology (MindTap Course List)
Fundamentals of Geotechnical Engineering (MindTap Course List)
Automotive Technology: A Systems Approach (MindTap Course List)
Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)
Mechanics of Materials (MindTap Course List)
Principles of Information Systems (MindTap Course List)
Management Of Information Security
Systems Analysis and Design (Shelly Cashman Series) (MindTap Course List)
Principles of Geotechnical Engineering (MindTap Course List)
Electric Motor Control
Solid Waste Engineering
Fundamentals of Chemical Engineering Thermodynamics (MindTap Course List)
EBK ELECTRICAL WIRING RESIDENTIAL
International Edition---engineering Mechanics: Statics, 4th Edition
Automotive Technology
Steel Design (Activate Learning with these NEW titles from Engineering!)
Enhanced Discovering Computers 2017 (Shelly Cashman Series) (MindTap Course List)
Structural Analysis
Network+ Guide to Networks (MindTap Course List)