Homework Question 2

Presented below is the shareholders' equity section of the balance sheet of the Milton Corporation as of 1-14-2021. Shareholders' Equity Common Stock (Par Value of $4/Share) $100,000 $3,925,000 Paid-in Capital in Excess of Par Retained Earnings Total Shareholders' Equity $375,000 $4,400,000 Milton sold the 25,000 shares of common stock outstanding as of 1-14- 2021 for $4,025,000, i.e., at an average price of $161/share. The common stock has a par value of $4/share. On 1-15-2021, Milton Corporation bought back 1,000 shares of its common stock for $200,000, i.e., $200 /share, and immediately retired the shares at that time. Milton accounts for the transaction as a share buyback. Milton's 1-15-2021 journal entry will include a Debit to retained Earnings for 157,000 Debit to Retained Earnings for 171,000 Credit to Paid-In Capital in Excess of Par for 175,000 Credit to Retained Earnings for 175,000 Debit to Retained Earnings for 200,000 Debit to Retained Earings for 156,000 Debit to Retained Earnings for 175,000 Credit to Retained Earnings for 200,000 Credit to Paid-In Capital in Excess of Par for 156,000 Credit to Paid-In Capital in Excess of Par for 157,000 Debit to Paid-In Capital in Excess of Par for 157.000 Debit to Paid-In Capital in Excess of Par for 200,000 Debit to Paid-In Capital in Excess of Par for 171,000 Credit to Retained Earnings for 156,000 O Credit to Retained Earnings for 157,000 Credit to Paid-In Capital in Excess of Par for 200,000 Debit to Paid-In Capital in Excess of Par for 156,000 Debit to Paid In Capital in Excess of Par for 175,000 Credit to Paid-In Capital in Excess of Par for 171,000 Credit to Retained Earnings for 171,000