Question
National Supplys shareholders equity included the following accounts at December 31, 2020: Required: 1. National Supply reacquired shares of its common stock in two separate
National Supplys shareholders equity included the following accounts at December 31, 2020:
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.
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 $18 million in 2021, $19 million in 2022, and $20 million in 2023. No dividends were paid during the three-year period.
Shareholders' Equity Common stock, 2 million shares at $1 par Paid-in capital-excess of par Retained earnings $ 2,000,000 16,000,000 82,000,000 February 15, 2021 February 17, 2022 November 9, 2023 Reacquired 260,000 shares at $11 per share. Reacquired 260,000 shares at $8.50 per share. Sold 170,000 shares at $10 per share (assume FIFO cost). Journal entry worksheet Record the purchase of shares on February 15, 2021 for retirement. Note: Enter debits before credits. Date General Journal Debit Credit February 15, 2021 Record entry Clear entry View general Journal Journal entry worksheet Record the purchase of shares on February 17, 2022 for retirement. Note: Enter debits before credits. Date General Journal Debit Credit February 17, 2022 Record entry Clear entry View general Journal Journal entry worksheet 1 2 3 > Record the sale of shares on November 9, 2023. Note: Enter debits before credits. General Journal Debit Credit Date November 09, 2023 Record entry Clear entry View general Journal Req 1 Retired Req 1 Treasury Stock Reg 2 Prepare the entry for each of the transactions given in the requirement above. Assume shares are treasury stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the purchase of 260,000 shares at $11 per share on February 15, 2021 that are accounted for as treasury stock. Note: Enter debits before credits. General Journal Debit Credit Date February 15, 2021 Record entry Clear entry View general Journal Req 1 Retired Req 1 Treasury Stock Reg 2 Prepare the entry for each of the transactions given in the requirement above. Assume shares are treasury stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the purchase of 260,000 shares at $8.50 per share on February 17, 2022 that are accounted for as treasury stock. Note: Enter debits before credits. General Journal Debit Credit Date February 17, 2022 Record entry Clear entry View general Journal Req 1 Retired Req 1 Treasury Stock Reg 2 Prepare the entry for each of the transactions given in the requirement above. Assume shares are treasury stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheetStep by Step Solution
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