National Supplys shareholders equity included the following accounts at December 31, 20 15:

Shareholders' Equity ($ in millions)

Common stock, 6 million shares at $1 par $ 6,000,000

Paid-in capital-excess of par $30,000,000

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) accou nted for as treasury stock.

February 15, 2016 Reacquired 300,000 shares at $8 per share.

February 17, 2017 Reacquired 300,000 shares at $5.50 per share.

November 9, 201 Sold 200,000 shares at $7 per share (assume FIFO cost).

2. Prepare the shareholders' equity section of National Supply's balance sheet at December 31, 2018, assuming the shares are (a) retired and (b) accounted for as treasury stock. Net income was $14 million in 2016, $15 million in 2017, and $16 million in 2018. No dividends were paid during the three-year period.