Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following is a summary of all relevant transactions of Caitlin Murphy Company since it was organized in 2020: In 2020, 500,000 shares are authorized

The following is a summary of all relevant transactions of Caitlin Murphy Company since it was organized in 2020:

In 2020, 500,000 shares are authorized and 110,000 shares of common stock ($10 par value) are issued at a price of $38

In 2021, 11,000 shares are issued as a stock dividend when the stock was selling for $46. Two thousand shares of common stock are bought in 2021 at a cost of $51 per share. These 2,000 shares are still in the company treasury.

In 2021, 50,000 preferred shares are authorized and the company issued 8,000 of them ($100 par value) at $106. Some of the preferred stock is reacquired by the company and were later reissued for $16,100 more than it cost the company.

In 2021 the corporation earned a total of $969,000 in net income after income taxes and paid out a total of $278,800 in cash dividends since incorporation.

Instructions 1) Prepare the beginning stockholders equity section of the balance sheet in proper form for the Caitlin Murphy Company as of December 31, 2020. 2) Prepare the stockholders equity section of the balance sheet in proper form for the Caitlin Murphy Company as of December 31, 2021. 3) Account for treasury stock using the cost method 4) Show computations that impacted the changes from the beginning stockholders equity.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quality And GMP Auditing Clear And Simple

Authors: James L. Vesper

1st Edition

0367400901, 978-0367400903

More Books

Students also viewed these Accounting questions

Question

3. List ways to manage relationship dynamics

Answered: 1 week ago