Question

The following information pertains to JAE Corp. at January 1, Year 1:

Common stock, $8 par, 13,000 shares authorized, 2,600 shares issued and outstanding	$	20,800
Paid-in capital in excess of par, common stock		13,400
Retained earnings		64,000

JAE Corp. completed the following transactions during Year 1:

1. Issued 700 shares of $8 par common stock for $27 per share.
2. Repurchased 240 shares of its own common stock for $24 per share.
3. Resold 50 shares of treasury stock for $25 per share.

Required
a. How many shares of common stock were outstanding at the end of the period?
b. How many shares of common stock had been issued at the end of the period?
c. Organize the transactions data in accounts under the accounting equation.
d. Prepare the stockholders’ equity section of the balance sheet reflecting these transactions.
Q1: What are the outstanding shares at the end of the period ?

Q2: What are the issue shared at the end of the period?

Organize the transactions data in accounts under the accounting equation. (Enter any decreases to account balances with a minus sign.)

	JAE CORPORATION Accounting Equation for the Year 1 Event Assets = Liabilities + Stockholders’ Equity Cash Common Stock + Paid-in Capital In Excess Common Stock + Paid-in Capital In Excess Treasury Stock – Treasury Stock + Retained Earnings Beg. bal. = + + + – + 1. = + + + – + 2. = + + + – + 3. = + + + – + End. bal. = + + + – +

Prepare the stockholders’ equity section of the balance sheet reflecting these transactions.

	JAE CORPORATION Balance Sheets (Partial) As of December 31 Stockholders' Equity Total paid-in capital Total stockholders’ equity

Answer 1

a) Outstanding shares = 2600+700-240+50 = 3110 Shares

b) Issued shares = 2600+700 = 3300 Shares

Organize the transactions data in accounts under the accounting equation. (Enter any decreases to account balances with a minus sign.)

JAE CORPORATION Accounting Equation for the Year 1 Event Assets = Liabilities + Stockholders’ Equity Cash Common Stock + Paid-in Capital In Excess Common Stock + Paid-in Capital In Excess Treasury Stock – Treasury Stock + Retained Earnings Beg. bal. = + 20800 + 13400 + – + 64000 1. 18900 = + 5600 + 13300 + – + 2. -5760 = + + + – 5760 + 3. 1250 = + + + 50 – -1200 + End. bal. = + 26400 + 26700 + 50 – 4560 + 64000

Prepare the stockholders’ equity section of the balance sheet reflecting these transactions.

	JAE CORPORATION Balance Sheets (Partial) As of December 31 Stockholders' Equity Contributed capital Common Stock 26400 paid in capital in excess of par value-Common Stock 26700 Paid in capital from sale of treasury Stock 50 Total paid-in capital 53150 Retained earnings 64000 Treasury Stock -4560 Total stockholders’ equity 112590