The following information applies to the questions displayed below Worldwide Com

Question

The following information applies to the questions displayed below 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 $38,400 and the following selected transactions occurred in the order given: a. Issued 62,000 shares of the common stock at $13 cash per share. b. Reacquired 2,200 shares at $16 cash per share from stockholders; the shares are now held in treasury. c. Reissued 1,100 of the shares in transaction (b) two months later at $19 cash per share. value: 10.00 points Required information Required: 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 a. b. C.

Explanation / Answer

Answer 1. Assets = Liabilities + Shareholders' Equity a. Cash    806,000.00 Common Stock    620,000.00 Paid in Capital in Excess of Par - Common Stock    186,000.00 b. Cash    (35,200.00) Treasury Stock    (35,200.00) c. Cash      20,900.00 Treasury Stock      17,600.00 Paid in Capital in Excess of Par - Treasury Stock        3,300.00 Answer 2. Journal Entry Date Particulars Dr. Amt. Cr. Amt. a. Cash    806,000.00 62,000 Shares X $13    Common Stock    620,000.00 62,000 Shares X $10    Paid in Capital in Excess of Par - Common Stock    186,000.00 62,000 Shares X $3 (To record the issue of Common Stock) b. Treasury Stock      35,200.00 2,200 Shares X $16    Cash      35,200.00 (To record the purchase of treasury stock) c. Cash      20,900.00 1,100 Shares X $19    Treasury Stock      17,600.00 1,100 Shares X $16    Paid in Capital in Excess of Par - Treasury Stock        3,300.00 1,100 Shares X $3 (To record the sale of Treasury Stock) Answer 3. WORLDWIDE COMPANY Balance Sheet (Partial) At Dec 31 Shareholders' Equity Contributed Capital Common Stock - $10 Par Value (200,000 Shares Authorized, 62,000 issued)    620,000.00 Paid in Capital in Excess of Stated Value - Common Stock    186,000.00 Paid in Capital in Excess of Stated Value - Treasury Stock        3,300.00 Total Contributed Capital    809,300.00 Retained Earnings      38,400.00 Sub-Total    847,700.00 Treasury Stock (1,100 Shares)    (17,600.00) Total Shareholders' Equity    830,100.00

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