Reconstructing transactions involving shareholders' equity. Shea Company began business on January 1. Its balance sheet on December 31 contained the shareholders' equity section shown in Exhibit 12.10.

EXHIBIT 12.10 SHEfi COMPANY Shareholders' Equity as of December 31 (Problem 34)

Common Stock ($5 par value) $100,000 Additional Paid-in Capital 509,600 Retained Earnings 50,000 Less Unrealized Holding Loss on Securities Available for Sale (7,000)

Less 1,200 Shares Held in Treasury (33,600)

Total Shareholders' Equity $619,000 During the year. Shea Company engaged in the following transactions:

(1) Issued shares for $30 each.

(2) Acquired a block of 2.000 shares for the treasury in a single transaction.

(3) Reissued some of the treasury shares.

(4) Sold for SI 2.000 securities available for sale that had originally cost $14,000. At the end of the year, securities available for sale, still on hand, that had originally cost $25,000 had market value of $18,000.

Assuming that these were the only common stock transactions during the year, answer the following questions:

a. How many shares did Shea Company issue for $30 each?

b. What was the price at which it acquired the treasury shares?

c. How many shares did it reissue from the block of treasury shares?

d. What was the price at which it reissued the treasury shares?

e. What journal entries did it make during the year?

f. In which statement or statements will Shea Company report the various gains and losses on its holdings of securities available for sale?