Question

In: Accounting

. The Rostinaja Company is incorporated at the beginning of Year One. For convenience, assume that...

. The Rostinaja Company is incorporated at the beginning of Year One. For convenience, assume that the company earns a reported net income of $130,000 each year and pays an annual cash dividend of

$50,000. The company is authorized to issue 200,000 shares of $3 par value common stock. At the start of Year One, the company issues 40,000 shares of this common stock for $8 per share. At the end of Year

Two, the company buys back 5,000 shares of its own stock for $12 per share. The cost method is used to

record these shares. At the start of Year Three, the company reissues 1,000 of these shares for $14 per

share. At the start of Year Four, the company reissues the remainder of the treasury stock for $9 per share.

a. Prepare the stockholders equity section of this company’s balance sheet as of December 31, Year

One.

b. Prepare the stockholders’ equity section of this company’s balance sheet as of December 31, Year

Two.

c. Prepare the stockholders’ equity section of this company’s balance sheet as of December 31, Year

Three.

d. Prepare the stockholders’ equity section of this company’s balance sheet as of December 31, Year

Four.

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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