The shareholders€™ equity section of Buzytown Industries€™ balance sheet reports the following:

REQUIRED:
a. How many shares of preferred stock were issued during 2018? What was the average issue price?
b. How many shares of common stock were issued during 2018? What was the average issue price?
c. Prepare the entry to record the repurchase of the company€™s own stock during 2018. What was the average repurchase price?
d. Assume that the treasury shares were purchased on the last day of 2018. Did the purchase increase or decrease the book value of the outstanding shares? By how much?

Transcribed Image Text:

2017 2018 Preferred stock (9%, $100 par value) Common stock ($10 par value, 750,000 shares authorized, 90,000 issued, and 5,000 held in treasury) Additional paid-in capital Retained earnings Less: Treasury stock Total shareholders' equity $ 200,000 $ 110,000 750,000 900,000 615,000* 333,000** 575,000 495,000 (110,000) $2,180,000 $1,688,000 *$615,000 = $150,000 PS + $465,000 CS **$333,000 = $35,000 PS + $298,000 CS