Question
National Supplys shareholders equity included the following accounts at December 31, 2020: Shareholders' Equity Common stock, 6 million shares at $1 par $ 6,000,000 Paid-in
National Supplys shareholders equity included the following accounts at December 31, 2020:
Shareholders' Equity | ||
Common stock, 6 million shares at $1 par | $ | 6,000,000 |
Paid-in capitalexcess of par | 48,000,000 | |
Retained earnings | 97,000,000 | |
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 460,000 shares at $11 per share. |
February 17, 2022 | Reacquired 460,000 shares at $8.50 per share. |
November 9, 2023 | Sold 320,000 shares at $10 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 $19 million in 2021, $21 million in 2022, and $23 million in 2023. No dividends were paid during the three-year period.
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