Washington Company has the following stockholders' equity accounts at December 31st, 2014.
Common Stock ($100 par value, authorized 8,000 shares) $480,000
Retained Earnings $294,000
1) Prepare entries in journal form to record the following transactions, which took place during 2015:
a) 280 shares of the outstanding stock were purchased at $97 per share. (These are to be accounted for using the cost
method).
b) A $20 per share cash dividend was declared.
c) The dividend declared in (b) above was paid.
d) The treasury shares purchased in (a) above were resold at $102 per share.
e) 500 shares of the outstanding stock were purchased at $105 per share.
f) 350 of the shares purchased in (e) above were resold at $96 per share.
2) Prepare the stockholders' equity section of Washington Company's balance sheet after giving effect to these transactions, assuming that the net income for 2015 was $94,000. State law requires the restriction of retained earnings for the amount of treasury stock.
Washington Company has the following stockholders' equity accounts at December 31st, 2014.
Common Stock ($100 par value, authorized 8,000 shares) $480,000
Retained Earnings $294,000
1) Prepare entries in journal form to record the following transactions, which took place during 2015:
a) 280 shares of the outstanding stock were purchased at $97 per share. (These are to be accounted for using the cost
method).
b) A $20 per share cash dividend was declared.
c) The dividend declared in (b) above was paid.
d) The treasury shares purchased in (a) above were resold at $102 per share.
e) 500 shares of the outstanding stock were purchased at $105 per share.
f) 350 of the shares purchased in (e) above were resold at $96 per share.
2) Prepare the stockholders' equity section of Washington Company's balance sheet after giving effect to these transactions, assuming that the net income for 2015 was $94,000. State law requires the restriction of retained earnings for the amount of treasury stock.