Suppose that Pia's Pizza engaged in the following transactions in the fiscal year ended December \(28,2007\).

a. The company issued 100,000 shares of common stock, par value of \(\$ 0.01\) per share, for \(\$ 24\) per share.

b. Cash revenues for the year amounted to \(\$ 100,690,000\), and cash expenses amounted to \(\$ 50,010,000\).

c. The company declared cash dividends of \(\$ 300,000\).

d. The company repurchased 25,000 shares of its own stock (treasury stock) for an average cost of \(\$ 22\) per share.

\section*{Instructions}

Use the accounting equation to show how Pia's Pizza would record each of the transactions. Then, update the shareholders' equity section of Pia's Pizza's balance sheet by filling in the shaded areas.

Transcribed Image Text:

Pia's Pizza Shareholder's Equity Section of the Balance Sheet (in thousands) Shareholder's Equity: Preferred stock ($0.01 par value per share; authorized 5,000,000 shares; no shares issued) At 12/28/07 12/28/06 Common stock ($0.01 par value per share; authorized 50,000,000 shares; XXXXXX shares issued in 2007 and 31,716,105 shares issued in 2006) $ 3:7 Additional paid-in capital-common stock 219,584 Accumulated other comprehensive income(loss) (8,116) (3.116) Retained carnings 293,921 Treasury stock (xxxxxx shares in 2007, and 13,603,587 shares in 2006 at cost) (351,434) Total Shareholder's equity $159.272