Global Marine obtained a charter from the state in January 2013, which authorize

Question

Global Marine obtained a charter from the state in January 2013, which authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $370,000 of net income and the following selected transactions occurred in the order given: a. Issued 110,000 shares of the common stock at $52 cash per share. b. Reacquired 22,000 shares at $47 cash per share. c. Reissued 8,500 shares from treasury for $48 per share. d. Reissued 8,500 shares from treasury for $46 per share. Required: 1. Indicating the account, amount, and direction of the effect (+ for increase and for decrease) for the above transaction. (Enter all amounts as positive values.)

Explanation / Answer

Global Marine All Amounts in $ Transaction Account Movement Account Movement Amount Amount No. Affected Affected of of Debit Credit Debit Credit 1 Cash + 5720000 Common Stock + 550000 Excess over paid-in capital + 5170000 2 Treasury Stock + 110000 Excess over paid-in capital - 924000 Cash - 1034000 3 Cash + 408000 Treasury Stock - 42500 Excess over paid-in capital + 365500 4 Cash + 391000 Treasury Stock - 42500 Excess over paid-in capital + 348500

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