LO3. How is treasury stock accounted for? a) What is treasury stock? b) Why migh

Question

LO3. How is treasury stock accounted for? a) What is treasury stock? b) Why might a company later reacquire some of its own stock as treasury stock? )ABC company recently repurchased some of its own stock as treasury stock for $1,000. The is now selling the treasury stock for $1,100. The journal entry would be: Accounts and Explanation Debit Credit Date How are dividends and stock splits accounted for? a) Journalize for the 1) declaration of cash dividend of $1,000 and 2) payment of cash dividend Date Accounts and Explanation Debit Credit 2) b) Why might some companies issue stock dividends instead of cash dividends? ABC Company currently has 100,000 shares of common stock with a par value of $2 before a 2- for-1 split. What is the number of shares and par value after the split? c) LOS. How is the complete corporate income statement prepared? a) What may appear on a corporation's income statement that generally does not appear for smaller business? LO6. How is equity reported for a corporation? a) What is included on the statement of retained earnings?

Explanation / Answer

L03 Journal entry Cash 1100            Treasury stock 1000            Additional Paid in capital- treasury stock 100 L04 1 Cash dividend 1000              Dividend payable 1000 2 Dividend payable 1000               Cash 1000

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