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 2018.

2. How much cash did the issuance of common stock bring in during 2018?

3. What was the cost of the treasury stock purchased during 2018? What was the cost of the treasury stock sold during the year? For how much was the treasury stock sold during 2018?

Transcribed Image Text:

Exhibit 10-8 Example Company Statement of Stockholders' Equity Year Ended December 31, 2018 Total Additional Retained Stockholders' Common Stock Paid-in Capital $120,000 Earnings $160,000 Treasury Stock $(25,000) Equity $445,000 110,000 66,000 $190,000 Balance, December 31, 2017 Issuance of Stock 20,000 90,000 66,000 Net Income Cash Dividends (40,000) (41,000) (40,000) Stock Dividends 13,000 28,000 Purchase of Treasury Stock Sale of Treasury Stock Balance, December 31, 2018 (18,000) 9,000 (18,000) 10,000 $318,000 19,000 $153,000 $145,000 $(34,000) $582,000