Question
ABC Inc. has the following stockholders equity on January 1, 2018: Common stock, 500,000 shares, $5 par $2,500,000 Paid in capital in excess of par-common
ABC Inc. has the following stockholders equity on January 1, 2018:
Common stock, 500,000 shares, $5 par $2,500,000
Paid in capital in excess of par-common $7,500,000
Treasury Stock, 50,000 shares $1,100,000
Retained earnings $6,000,000
Paid in capital Share repurchase $50,000
Throughout the year, ABC Inc. has made the following transactions:
January 7th | ABC Inc. acquires 20,000 shares when the market price was $24 per share as Treasury stock. |
February 5th | Retires 30,000 shares when the market price was $21 per share. |
March 19th | Reissues 50,000 shares of treasury stock at $25 per share. ABC Inc. uses the FIFO method. |
April 28th | ABC Inc. decides to retire their remaining treasury stock when the market is $23 per share. |
May 14th | Issues an additional 25,000 shares in exchange for a piece of equipment that has a fair market value of $500,000. |
July 20th | ABC Inc. declares that there will be a two-for-one stock split |
August 3rd | ABC Inc. declares a 10% stock dividend when the current market price is $25. There are fractional shares equivalent to 5,000 shares that will be paid in cash. |
October 12th | A $1 cash dividend is declared. The date of record is October 20th, and the date of payment will be October 31st. |
December 8th | A 40% stock dividend is issued. |
Required:
Prepare the appropriate journal entries for each transactions.
How many shares are issued and outstanding at the end of 2018?
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