The stockholders\' equity section of JAK Corporation\'s balance sheet on Decembe
ID: 2478262 • Letter: T
Question
The stockholders' equity section of JAK Corporation's balance sheet on December 31, 2016, was as follows: (Click the icon to view the balance sheet.) During 2017, the company had the following: Purchased 60.000 shares of its common stock for dollar840,000. Sold 14.000 shares of the treasury stock for dollar38 per share. Sold 31.000 shares of the treasury stock for dollar28 per share. Requirement: Prepare the stockholders' equity section of the company's balance sheet on December 31, 2017, assuming that the company had net income of dollar20,000,000 and paid a dividend of dollar1.85 per share at year end.Explanation / Answer
Stockholder's Equity
JAK Corporation's balance sheet
As on December 31, 2016
Common Stock - $7 Par (3,000,000 shares authorized , 1,500,000 shares issued and outstanding)
$ 10,500,000
Additional Paid in capital in excess of par-common
$ 9,000,000
Retained earnings
$ 26,500,000
Total Contributed Capital
$ 46,000,000
Treasury shares (60000-14000-31000)* ($840000 / 60000)
$ (210,000)
Total
$ 45,790,000
Additional Paid in capital -Treasury
$ 770,000
Stockholder's Equity
$ 46,560,000
Note: Calculation of Additional Paid in capital -Treasury :
Sales of 14000 shares (14000*38)
$ 532,000
Sales of 31000 shares (31000*28)
$ 868,000
Less: Cost of (14000+31000) =45000 Shares = 45000*(840000 / 60000) =
$ (630,000)
Additional Paid in capital -Treasury =
$ 770,000
Stockholder's Equity
JAK Corporation's balance sheet
As on December 31, 2016
Common Stock - $7 Par (3,000,000 shares authorized , 1,500,000 shares issued and outstanding)
$ 10,500,000
Additional Paid in capital in excess of par-common
$ 9,000,000
Retained earnings
$ 26,500,000
Total Contributed Capital
$ 46,000,000
Treasury shares (60000-14000-31000)* ($840000 / 60000)
$ (210,000)
Total
$ 45,790,000
Additional Paid in capital -Treasury
$ 770,000
Stockholder's Equity
$ 46,560,000
Note: Calculation of Additional Paid in capital -Treasury :
Sales of 14000 shares (14000*38)
$ 532,000
Sales of 31000 shares (31000*28)
$ 868,000
Less: Cost of (14000+31000) =45000 Shares = 45000*(840000 / 60000) =
$ (630,000)
Additional Paid in capital -Treasury =
$ 770,000
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