The following information applies to the questions displayed below. Worldwide Co
ID: 2584526 • Letter: T
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, S10 par value. During the first year, the company earned $37,900 and the following selected transactions occurred in the order given: a. Issued 57000 shares of the common stock at $11 cash per share. b. Reacquired 1,700 shares at $14 cash per share from stockholders; the shares are now held in treasury. c. Relssued 850 of the shares in transaction (b) two months later at S17 cash per share 1. 1 Required information 0.00 points 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 b. C.Explanation / Answer
1) Assets = Liabilities + Stockholders' Equity a. Cash 627000 = + Common stock 570000 (57000*11) (57000*10) Additional paid-in-capital-Common stock 57000 (57000*1) b. Cash -23800 = + Treasury stock -23800 (1700*14) c. Cash 14450 Treasury stock 11900 (850*17) = + (850*14) Additional paid-in-capital-Treasury stock 2550 (850*3) 2) Date Account Head & Description Debit Amount Credit Amount a. Cash 627000 Common stock 570000 Additional paid-in-capital-Common stock 57000 (to record issue of common stock) b. Treasury Stock 23800 cash 23800 (to record repurchase of shares) c. cash 14450 Treasury Stock 11900 Additional paid-in-capital-Treasury stock 2550 (to record issue treasury stock) 3) Stockholders' Equity $ $ Capital Stock Preferred stock 0 Common stock 627000 Total capital stock 627000 Additional paid-in capital Paid-in capital in excess of par-preferred stock 0 Paid-in capital in excess of par-Common stock 57000 Paid-in capital in excess of par-Treasury stock 2550 0 Total paid-in capital 686550 Retained earnings 0 Total paid-in capital & Retained earnings 686550 Less: Treasury stock (23800-11900) -11900 Total stockholders' equity 674650
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