Use the statement of stockholders’ equity in Exhibit 10-8, to answer the following questions:

1. Make journal entries to record the declaration and payment of cash dividends during 2010.

2. How much cash did the issuance of common stock bring in during 2010?

3. What was the cost of the treasury stock that was purchased during 2010?

What was the cost of the treasury stock that was sold during the year? For how much was the treasury stock sold during 2010?

Transcribed Image Text:

Example Company Statement of Stockholders' Equity Year Ended December 31, 2010 Additional Retained Common Stock Paid-in Capital Earnings Balance, December 31, 2009 Issuance of Stock Net Income $80,000 $160,000 $130,000 Treasury Stock $(25,000) Total 20,000 60,000 69,000 $345,000 80,000 69,000 Cash Dividends (20,000) (20,000) Stock Dividends 8,000 26,000 (34,000) 0 Purchase of Treasury Stock (10,000) (10,000) Sale of Treasury Stock Balance, December 31, 2010 10,000 5.000 $108,000 $256,000 $145.000 $(30,000) 15,000 $479,000 Exhibit 10-8 A