Homework Question 3

Presented below is the owners' equity section of the balance sheet of the Lincoln Corporation as of 12-31-2018. Shareholders' Equity Common Stock (Par Value of $1/Share) $100,000 Paid-in Capital in Excess of Par $1,900,000 Retained Earnings $2,000,000 Total Shareholders' Equity $4,000,000 . . . As of 12-31-2018, the 100,000 shares of common stock were issued (sold) for $2,000,000, i.e., an issue price of $20 per share. The common stock has a par value of $1 per share On 5-22-2019, Lincoln Corporation bought back 2,000 shares of its common stock for $102,000, i.e., $51 per share. On 7-29-2019, Lincoln bought back 3,000 shares of its common stock for $150,000, i.e., $50 per share. On 11-16-2019, Lincoln Corporation sold 4,000 shares of treasury stock for $208,000, i.e., $52 per share. Lincoln treats accounts for the purchase of its common stock and subsequent resale of that treasury stock as treasury stock transactions, i.e., Lincoln does NOT retire the shares when repurchased. Lincoln uses the cost method in conjunction with the weighted average method in accounting for treasury stock transactions. Lincoln's cost of the 4,000 shares of treasury stock sold on 11-15-2019 would be . . O 200,000 O 202,600 0 201,600 202,400 O 201,000 202,000 202,500 O 204,000 O 201,800 203,000