Several years ago, Douglas Company issued 33,000 shares of its $1 par value common stock for...

Several years ago, Douglas Company issued 33,000 shares of its $1 par value common stock for $18 per share. In the current year, Douglas’s board of directors approves a plan to buy back a portion of these common stock shares. Prepare journal entries for each of the following transactions and events.

a. On Monday, Douglas buys back 2,500 shares for $35 per share.

b. On Tuesday, Douglas reissues 1,000 shares of treasury stock for $37 per share.

c. On Wednesday, Douglas reissues 500 shares of treasury stock for $34 per share.

d. On Thursday, Douglas reissues 600 shares of treasury stock for $28.

e. On Friday, the board of directors declares a cash dividend of $1.00 per share.

Solutions

Expert Solution

Number	Journal Entries	Debit	Credit
a	Share Capital Account	2,500.00
	Additional Paid in Capital Account	42,500.00
	General Reserve/Retained Profit Account	42,500.00
	Cash/Bank Account		87,500.00
	(Buys back 2,500 shares for $35 per share, where the par value is $1 and share premium per share is $ 17)


b	Cash/Bank Account	37,000.00
	Treasury Stock Account		37,000.00
	Reissues 1,000 shares of treasury stock for $37 per share.


c	Cash/Bank Account	17,000.00
	Treasury Stock Account		17,000.00
	Reissues 500 shares of treasury stock for $34 per share.

d	Cash/Bank Account	16,800.00
	Treasury Stock Account		16,800.00
	Reissues 600 shares of treasury stock for $28

e	Dividend Account	30,500.00
	Dividend Payable Account
	Declares a cash dividend of $1.00 per share (30500 Shares @ $ 1)		30,500.00




	Working -J/E (a)	Number of Shares	Per Share	Total Amount
	Cash/Bank Account	2500	35	87,500.00
	Additional Paid in Capital Account	2500	-17	(42,500.00)
	Share Capital Account	2500	-1	(2,500.00)
	General Reserve/Retained Profit Account	2500	17	42,500.00

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

1. A company issued 5,000 shares of its $2 par value common stock for $25 per...

1. A company issued 5,000 shares of its $2 par value common stock for $25 per share on 9-1-17. The entry to record this transaction is a) Debit to ,,,,,,,,,,,,,,,,, for $,,,,,,,,,,,,,,, b) Credit to ,,,,,,,,,,,,,,,,, for $ ,,,,,,,,,,,,, c) Credit to ,,,,,,,,,,,,,,,,,, for $,,,,,,,,, 2. A company has total paid in capital from common stock of $1,500,000 and total paid in capital from preferred stock of $350,000. It has retained earnings of $275,000 and there is treasury stock of...

EverBlue Company issued 30,000 shares of common stock in 2018. The par value of the common...

EverBlue Company issued 30,000 shares of common stock in 2018. The par value of the common stock is $1 per share. The selling price is $20 per share. Which of the following is true? Group of answer choices Stockholders’ equity increases by $600,000. Stockholders’ equity increases by $30,000. Stockholders’ equity decreases by $30,000. Stockholders’ equity decreases by $600,000.

On January 1, each company issued 26,000 shares of $0.10 par value common stock for $160,000....

On January 1, each company issued 26,000 shares of $0.10 par value common stock for $160,000. Both companies commenced operations on this date. On January 2, each company borrowed $400,000 by issuing a 20-year, 7% note that specified interest plus $20,000 principal is due September 30 each year, beginning on September 30, 2014. On January 3, each company purchased land and a building for $420,000 cash. Both managers allocated $70,000 to the land and $350,000 to the building. On January...

A company with 50,000 authorized shares of $1 par common stock issued 10,000 shares at $10...

A company with 50,000 authorized shares of $1 par common stock issued 10,000 shares at $10 per share, Subsequently, the company declared and paid a $3 cash dividend per share. On the date the company declared the dividend, the market price of the shares was $30 per share. What is the effect of the dividend on Retained Earnings? Retained earnings decreased Retained earnings increased Retained earnings remained the same None of the above. Refer to the previous question. By what...

Marigold Corp. issued 10100 shares of its $5 par value common stock having a fair value...

Marigold Corp. issued 10100 shares of its $5 par value common stock having a fair value of $20 per share and 14700 shares of its $15 par value preferred stock having a fair value of $30 per share for a lump sum of $518000. How much of the proceeds would be allocated to the common stock? $162731 $355269 $202000 $228250

Starting a Company (1) Issues 50,000 shares of $10 par value common stock at par value...

Starting a Company (1) Issues 50,000 shares of $10 par value common stock at par value for cash. (2) Acquires land and building costing $225,000 with the payment of $50,000 cash and the assumption of a 20-year, 8-percent mortgage for the balance. (3) Purchases a used crane for $13,200 cash (4) Acquires raw materials costing $8,600 on account. (5) Returns defective raw materials purchased in (4) and costing $900 to the supplier. The account has not yet been paid. (6)...

Peace Company issued common shares with a par value of $59,000 and a market value of...

Peace Company issued common shares with a par value of $59,000 and a market value of $165,900 in exchange for 30 percent ownership of Symbol Corporation on January 1, 20X2. Symbol reported the following balances on that date: SYMBOL CORPORATION Balance Sheet January 1, 20X2 Book Value Fair Value Assets Cash $ 55,000 $ 55,000 Accounts Receivable 81,000 81,000 Inventory (FIFO basis) 126,000 156,000 Land 51,000 66,000 Buildings & Equipment 502,000 329,000 Less: Accumulated Depreciation (242,000) Patent 32,000 Total Assets...

Case A RED COMPANY issued 120,000 shares of its P25 par common stock for the net...

Case A RED COMPANY issued 120,000 shares of its P25 par common stock for the net assets of BLUE CORPORATION in a business combination completed on March1, 2019. Blue Corporation’s net assets are worth P3,800,000 at FMV. Out of pocket costs of the combination were as follows: Legal fees 26,000 Contingent consideration (probable & measurable) 18,000 Printing costs of stock certificates 8,500 Finder’s fees 27,000 Professional fees paid to a CPA 21,000 Fees paid to company lawyers 23,450 Fees paid...

The Monroe Corporation has 100,000 common shares issued and outstanding. This stock was issued several years...

The Monroe Corporation has 100,000 common shares issued and outstanding. This stock was issued several years ago at a price above the $10 per share par value. During the current year, the board of directors declared a 30 percent stock dividend so that 30,000 new shares were issued to the stockholders when the price of the stock was $30 per share. As a result of this dividend, what reduction was recorded in the reported amount of retained earnings ? __$600,000...

On August 31, 20X1, Wood Corp. issued 200,000 shares of its $20 par value common stock...

On August 31, 20X1, Wood Corp. issued 200,000 shares of its $20 par value common stock for the net assets of Pine, Inc. in a business combination accounted for by the acquisition method. The market value of Wood's common stock on August 31 was $45 per share. Wood paid a fee of $200,000 to the consultant who arranged this acquisition. Costs of registering and issuing the equity securities amounted to $150,000. No goodwill was involved in the purchase. What amount...

Subjects