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Share Repurchases. Your company has the following Stockholders Equity as of the beginning of the current year Common Stock; 350,000 shares outstanding, $1 par $350,000
Share Repurchases. Your company has the following Stockholders Equity as of the beginning of the current year
Common Stock; 350,000 shares outstanding, $1 par $350,000
Paid in Capital Common Stock $4,900,000
Retained Earnings $4,000,000
Accumulated Other Comprehensive Income $750,000
Total Stockholders Equity $10,000,000
During the year, the company entered into the following transactions:
- Repurchased 15,000 shares at a cost of $20 per share
- Sold 5,000 shares for $25 per share
- Declared a cash dividend of $.10 (ten cents) per share
- Net Income for the year was $100,000
Required: Prepare the Stockholders Equity section of the balance sheet at the end of the year under each of the following two methods:
- The company accounts for repurchased shares by retiring them.
- The company accounts for repurchased shares as Treasury Stock
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