Early in 2009, Tin Corporation was formed with authorization to issue 50,000 shares of $3 par value

Question:

Early in 2009, Tin Corporation was formed with authorization to issue 50,000 shares of $3 par value common stock. All shares were issued at a price of $10 per share. The corporation reported net income of $150,000 in 2009, $80,000 in 2010, and $100,000 in 2011. No dividends were declared in any of these three years.

In 2010, the company purchased its own shares for $30,000 in the open market. In 2011, it reissued all of its treasury stock for $40,000.

Instructions

a. Prepare the stockholders’ equity section of the balance sheet at December 31, 2011. Include a supporting schedule showing your computation of retained earnings at the balance sheet date.

b. As of December 31, compute the company’s book value per share of common stock.

c. Explain how the treasury stock transactions in 2010 and 2011 were reported in the company’s statement of cash flows.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...