chp 10

6)

At December 31, 2018, Longfellow Clothing had $226,700 of retained earnings, all unrestricted. During 2019, Longfellow earned net income of $92,000 and declared and paid cash dividends on common stock of $21,800. During 2019, Longfellow sold a bond issue with a covenant that required Longfellow to transfer from retained earnings to restricted retained earnings an amount equal to the principal of the bond issue, $50,000. At December 31, 2019, Longfellow has 30,000 shares of $5 par common stock issued and outstanding. Additional paid-in capital-common stock is $236,500.

Required:

Prepare the stockholders equity portion of Longfellows December 31, 2019 balance sheet.

7) Problem 10-83A Treasury Stock Transactions

Hansen Inc. engaged in the following transactions during the current year:

1. Repurchased 13,000 shares of its own $1 par common stock for $14 per share on January 14.
2. Sold 2,000 treasury shares to employees for $6 per share on January 31.
3. Repurchased 3,000 more shares of the $1 par common stock for $16 per share on July 24.
4. Sold the remaining 11,000 shares from the January 14 purchase and 1,200 of the shares from the July 24 purchase to employees for $6.50 per share on August 1.

2. Conceptual Connection: Determine what the effect on total stockholders' equity is for each of the four transactions.

Note the following:

1. Enter the net increase or decrease by transaction.
2. Enter all amounts as positive values.