The shareholders\' equity section of the balance sheet of TNL Systems Inc. inclu

Question

The shareholders' equity section of the balance sheet of TNL Systems Inc. included the following accounts at December 31, 2015: Shareholders' Equity (S in millions) $ 350 3,150 Common stock, 350 million shares at $1 par Paid-in capital-excess of par Paid-in capital-share repurchase Retained earnings 2,500 Required 1. During 2016, TNL Systems reacquired shares of its common stock and later sold shares in two separate transactions. Prepare the entries for both the purchase and subsequent resale of the shares assuming the shares are (a) retired and (b) viewed as treasury stock. (If no entry is required for a transactionlevent, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) a. On February 5, 2016, TNL Systems purchased 9 million shares at $12 per share b. On July 9, 2016, the corporation sold 3 million shares at $14 per share. c. On November 14, 2018, the corporation sold 3 million shares at $9 per share.

Explanation / Answer

1.) A.FOR PURCHASE OF SHARE:

05.02.2016

SHARE PURCHASE DR. $108

TO, BANK A/C $108

(BEING PURCHASE OF SHARE)   

B. FOR SALE OF SHARE:

09.07.2016

BANK A/C DR. $42

TO, SHARE SOLD $42

(BEING SALE OF SHARE)

C. 14.11.2018

BANK A/C DR. $27

TO, SHARE SOLD $27

(BEING SALE OF SHARE)

2.)

$ IN MILLIONS

RETIREMENT TREASURY STOCK

PURCHASE OF SHARE (9 MIL) 108

SALE OF SHARE(3 MIL) 42

SALE OF SHARE(3 MIL) 27

TOTAL SHAREHOLDER'S EQUITY 39

DISTRIBUTION OF CASH DIVIDENDS =$390000000/30000000

=$13 PER SHARE DISTRIBUTED AS DIVIDEND

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