Question
In 2017, Hobbs Corp. acquired 15,000 shares of its own $1 par value common stock at $18 per share. In 2018, Hobbs issued 10,000 of
In 2017, Hobbs Corp. acquired 15,000 shares of its own $1 par value common stock at $18 per share. In 2018, Hobbs issued 10,000 of these shares at $25 per share. Hobbs uses the cost method to account for its treasury stock transactions. What accounts and what amounts should Hobbs credit in 2018 to record the issuance of the 10,000 shares?
Treasury Additional Retained Common
Stock Paid-in Capital Earnings Stock
a. $180,000 $175,000
b. $180,000 $70,000
c. $240,000 $10,000
d. $170,000 $70,000 $10,000
Show all work and what formulas you use to calculate your answer.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started