Worldwide Company obtained a charter from the state in January that authorized 2
ID: 2526385 • Letter: W
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 $38,300 and the following selected transactions occurred in the order given:
b. Reacquired 2,100 shares at $14 cash per share from stockholders; the shares are now held in treasury.
c. Reissued 1,050 of the shares in transaction (b) two months later at $17 cash per share.
1) Indicating 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
2) Prepare journal entries to record each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
3) Prepare the stockholders’ equity section of the balance sheet at December 31. (Amounts to be deducted should be indicated by a minus sign.)
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 $38,300 and the following selected transactions occurred in the order given:
Explanation / Answer
Answers
Transaction
ASSETS
LIABILITIES
STOCKHOLDERS' EQUITY
a. Common Stock Issued
Cash [61000 x $11]
671000
Common Stock [61000 x $10]
610000
Additional paid In Capital - Common Stock [61000 x $1]
61000
b. Shares re acquired
Cash [1050 x $14]
$ (29,400.00)
Treasury Stock
$ (29,400.00)
c. Treasury stock re-issued
Cash [1050 x $17]
$ 17,850.00
Treasury Stock [1050 shares x $14]
$ 14,700.00
Additional Paid in capital - Treasury Stock [1050 shares x $3]
$ 3,150.00
TOTAL
$ 6,59,450.00
TOTAL
$ -
TOTAL
$ 6,59,450.00
Date
General Journal
Debit
Credit
a. Common Stock Issued
Cash
$ 6,71,000.00
Common Stock
$ 6,10,000.00
Additional paid In capital - Common Stock
$ 61,000.00
(common stock issued)
b. Shares re acquired
Treasury Stock
$ 29,400.00
Cash
$ 29,400.00
(shares re acquired)
c. Treasury stock re-issued
Cash
$ 17,850.00
Treasury Stock
$ 14,700.00
Additional Paid In Capital - Treasury Stock
$ 3,150.00
(treasury shares re issued)
Common Stock at $10 par
$ 6,10,000.00
Additional paid In capital - Common Stock
$ 61,000.00
Additional Paid In Capital - Treasury Stock
$ 3,150.00
Retained earnings
$ 38,300.00
Total
$ 7,12,450.00
Less: Treasury Stock [29400 - 14700]
$ 14,700.00
Total Stockholder's Equity
$ 6,97,750.00
Transaction
ASSETS
LIABILITIES
STOCKHOLDERS' EQUITY
a. Common Stock Issued
Cash [61000 x $11]
671000
Common Stock [61000 x $10]
610000
Additional paid In Capital - Common Stock [61000 x $1]
61000
b. Shares re acquired
Cash [1050 x $14]
$ (29,400.00)
Treasury Stock
$ (29,400.00)
c. Treasury stock re-issued
Cash [1050 x $17]
$ 17,850.00
Treasury Stock [1050 shares x $14]
$ 14,700.00
Additional Paid in capital - Treasury Stock [1050 shares x $3]
$ 3,150.00
TOTAL
$ 6,59,450.00
TOTAL
$ -
TOTAL
$ 6,59,450.00
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