Sheffield Inc. was authorized to issue 100000 £10 par value ordinary shares. As of December 31,...

Sheffield Inc. was authorized to issue 100000 £10 par value ordinary shares. As of December 31, 2020, the company had issued 54000 shares at an average price of £22 per share. During 2020, the company felt that the shares were undervalued so it purchased 9800 treasury shares at £16 per share. When the share price rebounded later in the year, the company sold 4200 of the treasury shares for £24 per share. Retained earnings was £1666000 at December 31, 2020.

Total equity at December 31, 2020 is

£2697200.

£2994000.

£2764400.

£2798000.

Solutions

Expert Solution

--Correct Answer = Option #4: £ 2,798,000

	Common Stock	Paid in Capital	Retained Earnings	Treasury Stock	Total Stockholder's Equity
Bal 31 Dec 2020	£ 1,188,000.00		£ 1,666,000.00		£2,854,000.00
Treasury Stock purchased				-£ 156,800.00	-£ 156,800.00
Sale of T Stock		£ 33,600.00		£ 67,200.00	£ 100,800.00
Total Equity at 31 Dec 2020	£ 1,188,000.00	£ 33,600.00	£ 1,666,000.00	-£ 89,600.00	£2,798,000.00 ANSWER

--
Working

	Common Stock	Paid in Capital	Retained Earnings	Treasury Stock
Bal 31 Dec 2020	=54000*22		1666000
Treasury Stock purchased				=-9800*16
Sale of T Stock		=4200*8		=4200*16

ekkarill92 answered 1 week ago

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