Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current
ID: 2425734 • Letter: M
Question
Mystic Lake Inc. bottles and distributes spring water. On July 9 of the current year, Mystic Lake reacquired 39,500 shares of its common stock
The stock outstanding when a corporation has issued only one class of stock.
at $42 per share. On September 22, Mystic Lake Inc. sold 30,100 of the reacquired shares at $51 per share. The remaining 9,400 shares were sold at $41 per share on November 23.
Required:
Capital contributed to a corporation by the stockholders and others.
A. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
1
2
3
4
5
6
7
8
B. What is the balance in Paid-In Capital
Capital contributed to a corporation by the stockholders and others.
from Sale of Treasury Stock on December 31 of the current year?selector 1
Debit
Credit
Points:
Feedback
Check My Work
Explanation
C. For what reasons might Mystic Lake have purchased the treasury stock? Check all that apply.
For reissuance to employees as a bonus according to stock purchase agreements.
The company wishes to receive more of its own dividends.
To provide shares for resale to employees.
The company wishes to increase the par value of its stock.
To support the market price of the stock.
A. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles. B. What is the balance in Paid-In CapitalCapital contributed to a corporation by the stockholders and others.
from Sale of Treasury Stock on December 31 of the current year? C. For what reasons might Mystic Lake have purchased the treasury stock? CHART OF ACCOUNTS Mystic Lake Inc. General Ledger ASSETS 110 Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 151 Prepaid Insurance 181 Land 193 Equipment 194 Accumulated Depreciation-Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 226 Interest Payable 231 Cash Dividends Payable 236 Stock Dividends Distributable 241 Salaries Payable 261 Mortgage Note Payable EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 315 Treasury Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 351 Cash Dividends 352 Stock Dividends 390 Income SummaryA. Journalize the transactions of July 9, September 22, and November 23. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
DATE DESCRIPTION POST. REF. DEBIT CREDIT1
2
3
4
5
6
7
8
B. What is the balance in Paid-In Capital
Capital contributed to a corporation by the stockholders and others.
from Sale of Treasury Stock on December 31 of the current year?selector 1
Debit
Credit
Points:
Feedback
Check My Work
Explanation
C. For what reasons might Mystic Lake have purchased the treasury stock? Check all that apply.
For reissuance to employees as a bonus according to stock purchase agreements.
The company wishes to receive more of its own dividends.
To provide shares for resale to employees.
The company wishes to increase the par value of its stock.
To support the market price of the stock.
Explanation / Answer
A 1 Jul-09 Share Capital A/c 1659000 To Share Allotment A/c 1659000 ( Being share capital capitalised) 2 Sep-22 Bank Account A/c Dr 1535100 To Share capital A/c 1264200 To profit on sale of Shares A/c ( premium ) 270900 ( Being shares sold more the the face value ) 3 Nov-30 Bank Account A/c Dr 385400 Discount ( loss on sale fo asset ) 9400 To Share capital A/c 394800 ( Being difference of unsold shares sold ) B Thes balance in paidup capital is 1911100 C The company had purchase the Maystic because the face value of the share is going to be high
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.