Question
In: Accounting
6. The stockholders' equity account balances of Kay Corporation for 2020 are given below: January 1...
6.
The stockholders' equity account balances of Kay Corporation
for 2020 are given below:
January 1 December 31
Common stock ...................... 648,000 720,000
Paid-in capital – common stock .... 540,000 594,000
Treasury stock .................... 160,000 36,800
Paid-in capital – treasury stock .. 5,000 ?
Retained earnings ................. 425,000 ?
The common stock account at January 1 consisted of 54,000 shares
that were outstanding at a $12 par value per share.
The treasury stock account at January 1 consisted of 10,000 shares
that had been re-acquired at a $16 cost per share.
During 2020, Kay Corporation entered into the following transactions:
March 23 Re-issued 2,400 of the treasury shares for $22 per share
June 9 Re-issued 3,700 of the treasury shares for $13 per share
August 15 Issued 6,000 shares of previously un-issued common stock
November 2 Re-issued 1,600 of the treasury shares for $14 per share
December 18 Declared and paid a $3.75 dividend per share on the
outstanding shares of common stock
Kay Corporation reported a net income of $293,760 for 2020.
Calculate the retained earnings account balance at December 31, 2020.Solutions
Expert Solution
| Computation of Profit or loss on reissue of treasury stock (adjusted in retained earnings) | |||||||
| Paid in capital-Treasury stock beginning balance | 5,000 | ||||||
| Reissue on Mar23: | |||||||
| Sale price (2400*22) | 52800 | ||||||
| Less: Cost (2400*16) | 38400 | ||||||
| Profit transferred to Paid in capital | 14,400 | ||||||
| Reissue on June 9; | |||||||
| Sales price (3700*13) | 48100 | ||||||
| Cost (3700*16) | 59200 | ||||||
| Loss transferred to paid in capital | -11100 | ||||||
| Reissue on Nov 02: | |||||||
| Sale price (1600*14) | 22,400 | ||||||
| Cost (1600*16) | 25,600 | ||||||
| Loss transferred to paid in capital | -3,200 | ||||||
| Net ending balance of Paid in capital -Treasury stock | 5,100 | ||||||
| (this means no amount transferred to retained earnings) | |||||||
| Computation of outstanding shares on Dec31: | |||||||
| Outstanding shares in the beginning (54,000-10,000) | 44,000 | ||||||
| Add: Reissue during the year (2400+3700+1600) | 7,700 | ||||||
| Add: Unissued shares issued | 6,000 | ||||||
| Outstanding shares at the end | 57,700 | ||||||
| Computation of Ending balance of Retained earnings: | |||||||
| Beginning balance of Retained eaarnings | 4,25,000 | ||||||
| Add: Net Income | 2,93,760 | ||||||
| Less: Dividend (57,700 shares @ 3.75) | -2,16,375 | ||||||
| Ending balance of Retained earnings | 5,02,385 | ||||||
| Answer is $502,385 | |||||||
ekkarill92 answered 2 years agoRelated Solutions
The stockholders' equity account balances of Kay Corporation for 2020 are given below: January 1 December...
The stockholders' equity account balances of Kay Corporation for 2020 are
given below:
January 1 December 31
Common stock ($12 par, 54,000 shares outstanding) ..... 648,000 720,000
Paid-in capital – common stock ........................ 540,000 594,000
Treasury stock (10,000 share; $16 cost per share) ..... 160,000 36,800
Paid-in capital – treasury stock ...................... 5,000 ?
Retained earnings ..................................... 425,000 ?
During 2020, Kay Corporation entered into the following transactions:
March 23 Re-issued 2,400 of the treasury shares for $13 per share...
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Daryl Corporation produces and sells hats. The
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Common Stock, $5 par (100,000 shares authorized, 40,000
shares
issued) $200,000
PIC in Excess par - Common
Stock $100,000
Retained
Earnings $750,000
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cost) $50,000
The following transactions occurred during the
year:
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share on the Common Stock outstanding.
Dividend
will be paid on 2/09.
2/09 Paid the Cash Dividend that was previously
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3/23 Reissued 2,500...
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At the beginning of 2020, Braun Corporation had the following
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Paid-In Capital, Treasury Stock $5,000
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Retained Earnings $1,200,000
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_____________________________________
Total Stockholders’ Equity $2,305,000
The paid-in capital from stock options relates to options granted
on 1/1/12 to the CEO as incentive compensation. As of 1/1/20, the
remaining expected...
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At the beginning of 2020, Brown Corporation had the following
stockholders’ equity balances in its general ledger:
Common Stock, $10 Par Value
$2,500,000
Paid-In Capital in Excess of Par: Common
1,500,000
Paid-In Capital, Treasury Stock
10,000
Paid-In Capital, Stock Options
40,000
Retained Earnings
3,000,000
Treasury Stock (10,000 shares)
(180,000)
Total
Stockholders’ Equity
$6,870,000
The paid-in capital from stock options relates to options
granted on 1/1/18 to the CEO as incentive compensation. As of
1/1/20, the remaining expected benefit period is...
The stockholders’ equity accounts of Concord Corporation on January 1, 2020, were as follows. Preferred Stock...
The stockholders’ equity accounts of Concord Corporation on
January 1, 2020, were as follows.
Preferred Stock (8%, $48 par, 11,000 shares authorized)
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Common Stock ($1 stated value, 2,100,000 shares
authorized)
1,300,000
Paid-in Capital in Excess of Par—Preferred Stock
150,000
Paid-in Capital in Excess of Stated Value—Common Stock
1,450,000
Retained Earnings
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Treasury Stock (10,500 common shares)
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During 2020, the corporation had the following transactions and
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1
Issued 24,000 shares of common...
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10,000 shares authorized) $ 384,000 Common Stock ($1 stated
value,
1,950,000 shares authorized) 1,150,000 Paid-in Capital in Excess
of
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Value—Common Stock 1,400,000 Retained Earnings 1,800,000
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Stock (11,000 common shares) 55,000 During 2020, the
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Carl has the following transactions affecting stockholders’
equity in the year.
March
1 Issues 6,000 additional
shares of $1 par value common stock for $50 per share.
May
10 Repurchases 1,000
shares of treasury stock for $58 per share.
June
21 Reissues 500 shares of
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On January 1, 2020, the stockholders’ equity section of Bramble
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in excess of par $1,100,000; and retained earnings $1,170,000.
During the year, the following treasury stock transactions
occurred.
Mar.
1
Purchased 52,000 shares for cash at $15 per share.
July
1
Sold 12,000 treasury shares for cash at $17 per share.
Sept.
1
Sold 10,000 treasury shares for cash at $14 per share.
(a)
Your Answer
Correct Answer (Used)
Journalize...
Stockholders’ Equity: Transactions and Balance Sheet Presentation The stockholders’ equity of Summit Corporation at January 1...
Stockholders’ Equity: Transactions and Balance Sheet
Presentation
The stockholders’ equity of Summit Corporation at January 1
follows:
7 Percent preferred stock, $100 par value, 20,000 shares
authorized;
5,000 shares issued and outstanding
$500,000
Common stock, $15 par value, 100,000 shares authorized;
40,000 shares issued and outstanding
600,000
Paid-in capital in excess of par value-Preferred stock
24,000
Paid-in capital in excess of par value-Common stock
360,000
Retained earnings
325,000
Total Stockholders' Equity
$1,809,000
The following transactions, among others, occurred during the...
Stockholders’ Equity: Transactions and Balance Sheet Presentation The stockholders’ equity of Summit Corporation at January 1...
Stockholders’ Equity: Transactions and Balance Sheet
Presentation The stockholders’ equity of Summit Corporation at
January 1 follows: 7 Percent preferred stock, $100 par value,
20,000 shares authorized; 5,000 shares issued and outstanding
$500,000 Common stock, $15 par value, 100,000 shares authorized;
40,000 shares issued and outstanding 600,000 Paid-in capital in
excess of par value-Preferred stock 24,000 Paid-in capital in
excess of par value-Common stock 360,000 Retained earnings 325,000
Total Stockholders' Equity $1,809,000 The following transactions,
among others, occurred during the...
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