[The following information applies to the questions displayed below. Global Mari

Question

[The following information applies to the questions displayed below. Global Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $320,000 of net income and the following selected transactions occurred in the order given: a. Issued 100,000 shares of the common stock at $47 cash per share b. Reacquired 17,000 shares at $42 cash per share c. Reissued 6,000 shares from treasury for $43 per share d. Reissued 6,000 shares from treasury for $41 per share 25. 0.50 points value: Required information You did not receive credit for this question in a previous attempt Required 1. Indicate the account, amount, and direction of the effect on above transaction. (Enter any decreases to account balances with a minus sign.) Assets Liabilities Stockholders' Equity 6,400,000 Common Stock Additional Paid-in Capital, Common Stock Treasury Stock Treasury Stock Additional Paid-in Capital, Treasury Stock Treasury Stock Additional Paid-in Capital, Treasury Stock a. Cash b. Cash c. Cash d. Cash

Explanation / Answer

Answer 1

Answer 2

Journal Entries

a

Cash A/c Dr. $ 4700000

To Common Stock A/c Cr. $ 500000

To Additional Paid in Capital, Common Stock A/c Cr. $ 4200000

b

Treasury stock A/c DR. $ 714000

To cash A/c Cr. $ 714000

c

Cash A/c Dr. $ 258000

To Treasury Stock A/c Cr. $ 252000

To Additional Paid in Capital, Treasury Stock A/c Cr. $ 6000

d

Cash A/c Dr. $ 246000

Additional Paid in Capital, Treasury Stock A/c Cr. $ 6000

To Treasury Stock A/c Cr. $ 252000

Answer 3

ASSETS AMOUNT = LIABILITIES AMOUNT a Cash 4700000 Common Stock 500000 Additional Paid in Capital, Common Stock 4200000 b cash - 7140000 Treasury stock -714000 c Cash 258000 Treasury stock 252000 Additional Paid in Capital,Treasury stock 6000 d Cash 2460000 Treasury stock 252000 Additional Paid in Capital,Treasury stock -6000

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