C Chegg Study | Guided So x M Final Exam Dezto. mheducation.com/hm.tpx Whyville

Question

C Chegg Study | Guided So x M Final Exam Dezto. mheducation.com/hm.tpx Whyville Corporation obtained its charter from the state in January that authorized 500,000 shares of common stock, $1 par value. During the first year, the company earned $49,000 and the following selected transactions occurred in the order given: a. Issued 110,000 shares of the common stock at $14 cash per share b. Reacquired 4,100 shares at $15 cash per share to use as stock incentives for senior management 33, value Required Information 3.00 points Required 1. Indicate the account, amount, and direction of the effect for the above transactions. (Enter any decreases to account balances with a minus sign.) Assets Liabilities Stockholders' Equit a. 3 8:21

Explanation / Answer

1 ASSETS = LIABILITIES + STOCKHOLDER'S EQUITY CASH 500000 = 0 + SHARES 500000 CASH 49000 = 0 + PROFIT 49000 CASH 549000 = 0 + SHARES 500000 PROFIT 49000 CASH 1540000 = 0 + SHARES 1540000 CASH -615000 = 0 + PROFIT -49000 LOSS ON BUY BACK -561900 SHARES -4100 CASH 1474000 = 0 + SHARES 2035900 LOSS ON BUY BACK -561900 2 CASH A/C DR. 1650000 TO SHARE CAPITAL 110000 TO SHARE PREMIUM A/C   1540000 (BEING SHARES ISSUED AT PREMIUM)

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