Worldwide Company obtained a charter from the state in January that authorized 2

Question

Worldwide Company obtained a charter from the state in January that authorized 200,000 shares of common stock, $10 par value. During the first year, the company earned $39,100 and the following selected transactions occurred in the order given:

A. Issued 69,000 shares of the common stock at $12 cash per share.

B. Reacquired 2,900 shares at $15 cash per share from stockholders; the shares are now held in treasury.

C. Reissued 1,450 of the shares in transaction (b) two months later at $18 cash per share.

1. Required:

Indicationg the account, amount, and direction of the effect on the above transaction.(Enter any decreases to account balances with a minus sign.)

2. Prepare journal entries to record each transaction.(if no entry is required for a transaction/event, select no journal entry in the first account field.

A. record the issuance of 69,000 shares of common stock with a par value $10 for a price of $12 per share

B. record the purchase of 2,900 shares of previously issued common stock for a price of $15 per share.

C. record the re-issuance of 1450 shares of treasury stock treasury previously purchased for a price of $15 per share and sold for $18 per share

3. prepare the stockholders equity section of the balance sheet at December 31.(Amounts to be deducted should be indicated by a minus sign.) TIP: because this is the first year of operations retained earnings has a zero balance at the beginning of the year.

Assets = liabilities + stockholders equity A    B C

Explanation / Answer

Worldwide Company obtained a charter from the state in January that authorized 2

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