Worldwide Company obtained a charter from the state in January that authorized 2
ID: 2528641 • 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 $37,900 and the following selected transactions occurred in the order given:
Reacquired 1,700 shares at $14 cash per share from stockholders; the shares are now held in treasury.
Reissued 850 of the shares in transaction (b) two months later at $17 cash per share.
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 $37,900 and the following selected transactions occurred in the order given:
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
Transaction Assets = Liabilities + Equity a 627000 = + 627000 b -23800 = + -23800 c 14450 = + 14450 Total 617650 = + 617650 Transaction Account Title Debit Credit a Cash 627000 Common Stock 570000 Additional paid-in-stock - Common Stock 57000 (Issue of 57,000 shares @$11.00 per share) b Treasury Stock 23800 Cash 23800 (Reacuisitin of 1,700 shares of onw stock @14 per share) c Cash 14450 Treasury Stock 11900 Additional paid-in-stock - Common Stock 2550 (Reissue of 850 shares of treasury stock @$17.00 per share) WORLWIDE COMPANY Balance sheet (Partial ) At December 31 Contributed Capital Common stock, $10 par, 200,000 shares authorized 570000 57,000 sahes issued and paid-up Paid-in-capital in excess of par, common stock 59550 Total Contributed Capital 629550 Retained Earnings Balance as at January 1, 0 Net income for the year 37900 Balanc as at December 31 37900 Total 667450 Treasury stock , 850 shares @$14 per share -11900 Total Stockholders' equity 655550
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