Question
In: Accounting
On May 4, 2019, Docker Inc. purchased 850 shares of its own common stock in the...
On May 4, 2019, Docker Inc. purchased 850 shares of its own common stock in the market at a price of $18.50 per share. On September 19, 2019, 500 of these shares were sold in the open market at a price of $20.20 per share. There were 35,000 shares of Docker common stock outstanding prior to the May 4 purchase of treasury stock. A $0.35 per share cash dividend on the common stock was declared and paid on June 15, 2019.
Required:
a. Use the horizontal model on Docker's financial
statements for the purchase of the treasury stock on May 4, 2019.
Indicate the financial statement effect.
|
Assets |
= |
Liabilities |
+ |
Stockholders Equity |
<- |
Net Income |
= |
Revenues |
- |
Expenses |
||||||
|
= |
+ |
<- |
= |
- |
||||||||||||
|
= |
+ |
<- |
= |
- |
||||||||||||
b. Use the horizontal model on Docker's financial
statements for the declaration and payment of the cash dividend on
June 15, 2019. Indicate the financial statement effect.
|
Assets |
= |
Liabilities |
+ |
Stockholders Equity |
<- |
Net Income |
= |
Revenues |
- |
Expenses |
||||||
|
= |
+ |
<- |
= |
- |
||||||||||||
|
= |
+ |
<- |
= |
- |
||||||||||||
c. Use the horizontal model on Docker's financial
statements for the declaration and payment of the sale of the
treasury stock on September 19, 2019. Indicate the financial
statement effect.
|
Assets |
= |
Liabilities |
+ |
Stockholders Equity |
<- |
Net Income |
= |
Revenues |
- |
Expenses |
||||||
|
= |
+ |
<- |
= |
- |
||||||||||||
|
= |
+ |
<- |
= |
- |
||||||||||||
Solutions
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