Question

PLEASE TELL ME HOW TO GET TO THESE ANSWERS AND SHOW WORK.

Below is the shareholders’ equity section of Matt Co.’s balance sheet for December 31, 2018 and December 31, 2017. Matt uses the treasury stock method to account for repurchases. During 2017, Matt repurchased 1,000 shares at $10 per share.

	December 31, 2018	December 31, 2017
Common Stock (par value $0.01)	120	100
Paid-in Capital, in excess of par	189,880	149,900
Paid-in Capital, share repurchase	3,200	0
Treasury Stock	(6,000)	(10,000)
Retained Earnings	54,000	53,000
	241,200	193,000

During 2018, the following events took place:

On January 17, Matt issued new common shares of stock to new investors for $20 per share.

On September 12, Matt reissued 400 of the shares it had in treasury.

On December 18, the company declared dividends of to be paid to shareholders. The dividend will be paid on January 6, 2019.

For the year 2018, Matt reported net income of $6,000.

1. How many shares were issued on January 17, 2018? (5 points)

2,000 new shares

Cash                             40,000

            Common Stock                                     20

            Paid-in Capital, in excess of par        39,980

2. When Matt reissued its own shares on September 12, 2018, how much did the company receive per share? (5 points)

$18 per share

Cash                             7,200

            Treasury Stock                                      4,000

            Paid-in Capital, share repurchase           3,200

3. How much dividends did Matt declare on December 18, 2018? (5 points)

53,000 + 6,000 – Dividends = 54,000

Dividends = $5,000

Answer 1