In: Accounting
2. Carl Corporation designs and produces a line of golf
equipment and golf apparel. Carl has 150,000 shares of common stock
outstanding as of the beginning of the year. Carl has the following
transactions affecting stockholders’ equity during the year.
March 1 Issues 60,000 additional shares of $1 par value common
stock for $50 per share. May 10 Repurchases 10,000 shares of
treasury stock for $58 per share. June 1 Declares a cash dividend
of $1.00 per share to all stockholders of record on June 15. July 1
Pays the cash dividend declared on June 1. October 21 Reissues
5,000 shares of treasury stock purchased on May 10 for $62 per
share.
Required: Record each of these transactions (10 points).
Solution :
Journal Entries - Carl Corporation | |||
Date | Particulars | Debit | Credit |
1-Mar | Cash Dr | $3,000,000.00 | |
To Common Stock | $60,000.00 | ||
To Paid in capital in excess of par - common stock | $2,940,000.00 | ||
(To record issue of shares) | |||
10-May | Treasury stock Dr | $580,000.00 | |
To Cash | $580,000.00 | ||
(To record purchase of own shares) | |||
1-Jun | Dividends Dr [(150000+60000-10000)*$1] | $200,000.00 | |
To Dividend payable | $200,000.00 | ||
(To record cash dividend declared) | |||
1-Jul | Dividend payable Dr | $200,000.00 | |
To Cash | $200,000.00 | ||
(To record payment of dividend) | |||
21-Oct | Cash Dr (5000*$62) | $310,000.00 | |
To Treasury Stock | $290,000.00 | ||
To Additional paid in capital | $20,000.00 | ||
(To record reissue of treasury shares) |