Business
Engineering
Math
Science
Social Science
Cornerstones of Financial Accounti...
Solutions
Cornerstones of Financial Accounti...
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:
- Sold 3,300 shares of common stock for $15 per share.
- Sold 1,000 shares of 12%, $100 par preferred stock at $105 per share.
- Declared and paid cash dividends of $8,000.
- Repurchased 1,000 shares of treasury stock (common) for $38 per share.
- Sold 400 of the treasury shares for $42 per share.
Required:
- Prepare the journal entries for Transactions a through e.
- Assume that 2020 net income was $87,000. Prepare a statement of stockholders’ equity at December 31, 2020.
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:
- For Purchase of treasury stock:
Treasury stock account is debited and cash account is credited with the cost of treasury stock purchased.
- For Sale / Reissuance of treasury stock:
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:
- For Purchase of treasury stock:
Treasury stock account is debited and cash account is credited with the cost of treasury stock purchased.
- For Sale / Reissuance of treasury stock:
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.
Chapter 10 Solutions
Additional Business Solutions
Find more solutions based on key concepts
Show solutions addThe following is a list of six control plans from this chapter, followed by a list of five situations that have...
Accounting Information Systems
Audio Outfitter Inc., which uses a perpetual inventory system, experienced a normal inventory shrinkage of 13,6...
Financial & Managerial Accounting
Financial statements from the end-of-period spreadsheet Triton Consulting is a consulting firm owned and operat...
Corporate Financial Accounting
Chapter 2 explains the difference between positive analysis and normative analysis. In the debate about whether...
Principles of Macroeconomics (MindTap Course List)
Discuss the similarities and differences between the discounted dividend and corporate valuation models.
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
What arguments could you give for or against the idea that body language iSa science with principles that can b...
Essentials of Business Communication (MindTap Course List)
Outline the incorporation process, and describe the basic corporate structure.
Foundations of Business (MindTap Course List)
Suppose that a countrys inflation rate increases sharply. What happens to the inflation tax on the holders of m...
Brief Principles of Macroeconomics (MindTap Course List)
A point inside the production possibilities frontier is a. efficient but not feasible. b. feasible but not effi...
Principles of Microeconomics (MindTap Course List)
BOND VALUATION Madsen Motorss bonds have 23 years remaining to maturity. Interest is paid annually; they have a...
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
As of April 2006, roughly 50 million .com web domain names were registered (e.g., yahoo.com). a. How many domai...
Probability and Statistics for Engineering and the Sciences
The Commerce Department reported receiving the following applications for the Malcolm Baldrige National Quality...
STATISTICS F/BUSINESS+ECONOMICS-TEXT
AMORTIZATION SCHEDULE WITH A BALLOON PAYMENT You want to buy a house that costs 140,000. You have 14,000 for a ...
Fundamentals of Financial Management (MindTap Course List)
All of the following topics fall within the study of microeconomics EXCEPT a. the impact of cigarette taxes on ...
Principles of Economics (MindTap Course List)
(MarginaI Utility) Is it possible for marginal utility to be negative while total utility is positive? If yes, ...
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Statement of stockholders equity Financial information related to Organic Products Company for the month ended ...
Financial And Managerial Accounting
List the sales rep number and name for every sales rep who represents at least one customer with a credit limit...
A Guide to SQL
What are the issues associated with adopting a formal framework or model?
Principles of Information Security (MindTap Course List)
Convert the ERD from Problem 10 into a corresponding UML class diagram.
Database Systems: Design, Implementation, & Management
Identify and discuss key benefits that are common to the use of ERP, CRM, and PLM enterprise systems, whether i...
Fundamentals of Information Systems
What is data independence, and why is it lacking in file systems?
Database Systems: Design, Implementation, & Management
What is meant by an organizations technology infrastructure?
Principles of Information Systems (MindTap Course List)
Optimization can be found in which type of application software? a. spreadsheets b. word-processing programs c ...
Fundamentals of Information Systems
What must be known to use the compound-rest taper turning method?
Precision Machining Technology (MindTap Course List)
State whether the following are true or false. a. Aeolian soils are transported and deposited by wind. b. Marbl...
Fundamentals of Geotechnical Engineering (MindTap Course List)
Technician A says that liquid cooling an engine helps to maintain a consistent operating temperature. Technicia...
Automotive Technology: A Systems Approach (MindTap Course List)
What is the difference between a dimension and unit?
Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)
A plane frame is restrained al joints A and C, as shown in the figure. Members AB and BC are pin connected at B...
Mechanics of Materials (MindTap Course List)
Finally, she asks, What steps would you take and what resources would you use to review the current IS strategi...
Principles of Information Systems (MindTap Course List)
Why is maintenance needed for information security management systems?
Management Of Information Security
Suppose you tried to explain the concept of weighted models evaluation models to a manager, and she responded b...
Systems Analysis and Design (Shelly Cashman Series) (MindTap Course List)
The following are the results of a sieve analysis. a. Determine the percent finer than each sieve and plot a gr...
Principles of Geotechnical Engineering (MindTap Course List)
What becomes of the energy used to brake the motor dynamically for the two methods described?
Electric Motor Control
Determine the time required to complete a filling and emptying cycle for a refuse collection vehicle serving a ...
Solid Waste Engineering
Convert P = 5.00 atm into Pa, bar, and psia.
Fundamentals of Chemical Engineering Thermodynamics (MindTap Course List)
Under what condition may nonmetallic-sheathed cable (Type NM) be fished in the hollow voids of masonry block wa...
EBK ELECTRICAL WIRING RESIDENTIAL
The resultant of the four belt tensions and the couple C is a force R acting through point O. Determine C and R...
International Edition---engineering Mechanics: Statics, 4th Edition
In front-wheel drivetrains, the CV joint nearer the transaxle is the____. a. inner joint b. inboard joint c. ou...
Automotive Technology
The tension member is an L631 2 5 16 . It is connected to a 5 16 -inch-thick gusset plate with 3 4 -inch-diamet...
Steel Design (Activate Learning with these NEW titles from Engineering!)
While encrypted files offer greater security than unencrypted files, an operating system may require more time ...
Enhanced Discovering Computers 2017 (Shelly Cashman Series) (MindTap Course List)
Determine the force in each member of the truss supporting a floor deck as shown in Fig. P4.29. The deck is sim...
Structural Analysis
_____ in SONET are analogous to the _____ of T-carriers. a. Throughput, digital signal levels b. OC levels, dig...
Network+ Guide to Networks (MindTap Course List)
