Frost\'s Frozen Confections has issued 1,000,000 shares of common stock with a p
ID: 2425492 • Letter: F
Question
Frost's Frozen Confections has issued 1,000,000 shares of common stock with a par of $1.00 an additional paid in capital of $7,000,000. Recently, Frost's Frozen Confections has been most profitable. On 7/1/14 the company re-purchased one half of its stock for $15.00 per share. On 10/1/14 the company sold 1/2 of the treasury stock to Berliner's Big Bad Brokerage for $18.00 per share. Please provide the following: A workpaper that displays the account changes leading to ending balances for the treasury stock, capital stock and additional paid in capital accounts. Prepare the footnote for treasury stock.Explanation / Answer
Capital stock: par value
initial:$1*1,000,000= $1,000,000
after 7/1/14: $1*1,000,000/2= $500,000
after 10/1/14:$1*1,000,000=$1,000,000
Capital stock: Additional paid
initial:7,000,000
after 7/1/14: 7,000,000*(500,000/1,000,000)=$3,500,000
after 10/1/14:$1*3,500,000/2=$1,750,000
Treasury stock:
initially:%0
after 7/1/14= 500,000*1=500,000
after 10/1/14=250,000*1=250,000
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