National Supplys shareholders equity included the following accounts at December 31, 2020 Shareholders' Equity Common stock, 5 million shares at $1 par $ 5,000,000 Paid in capitalexcess of par 25,000,000 Retained earnings 86,500,000 Required 1 National Supply reacquired shares of its common stock in two separate transactions and later sold shares Prepare the entries for each of the transactions under each of two separate assumptions the shares are (a) retired and (b) accounted for as treasury stock February 15, 2021 Reacquired 320,000 shares at $8 per share February 17, 2022 Reacquired 320,000 shares at $5 50 per share November 9, 2023 Sold 215,000 shares at $7 per share (assume FIFO cost) 2 Prepare the shareholders equity section of National Supplys balance sheet at December 31, 2023, assuming the shares are (a) retired and (b) accounted for as treasury stock Net income was $12 million in 2021, $14 million in 2022, and $16 million in 2023 No dividends were paid during the three year period

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 14, 2024

National Supplys shareholders equity included the following accounts at December 31, 2020: Shareholders' Equity Common stock, 5 million shares at $1 par $ 5,000,000 Paid-in

National Supplys shareholders equity included the following accounts at December 31, 2020:

Shareholders' Equity
Common stock, 5 million shares at $1 par	$	5,000,000
Paid-in capitalexcess of par		25,000,000
Retained earnings		86,500,000

Required: 1. National Supply reacquired shares of its common stock in two separate transactions and later sold shares. Prepare the entries for each of the transactions under each of two separate assumptions: the shares are (a) retired and (b) accounted for as treasury stock.


February 15, 2021	Reacquired 320,000 shares at $8 per share.
February 17, 2022	Reacquired 320,000 shares at $5.50 per share.
November 9, 2023	Sold 215,000 shares at $7 per share (assume FIFO cost).

2. Prepare the shareholders equity section of National Supplys balance sheet at December 31, 2023, assuming the shares are (a) retired and (b) accounted for as treasury stock. Net income was $12 million in 2021, $14 million in 2022, and $16 million in 2023. No dividends were paid during the three-year period.