Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The shareholders' equity section of the balance sheet of TNL Systems Inc. included the following accounts at December 31, 2020: Shareholders' Equity Common stock, 370

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
The shareholders' equity section of the balance sheet of TNL Systems Inc. included the following accounts at December 31, 2020: Shareholders' Equity Common stock, 370 million shares at $1 par Paid-in capital-excess of par Paid-in capital-share repurchase Retained earnings ($ in millions) $ 370 2,590 1 2,700 Required: 1. During 2021, TNL Systems reacquired shares of its common stock and later sold shares in two separate transactions. Prepare the entries for both the purchase and subsequent resale of the shares assuming the shares are (a) retired and (b) viewed as treasury stock. a. On February 5, 2021, TNL Systems purchased 9 million shares at $10 per share. b. On July 9, 2021, the corporation sold 3 million shares at $12 per share. c. On November 14, 2023, the corporation sold 3 million shares at $7 per share. 2. Prepare the shareholders' equity section of TNL Systems' balance sheet at December 31, 2023, comparing the two approaches. Assume all net income earned in 2021-2023 was distributed to shareholders as cash dividends. A Record the purchase of 9 million shares at $10 per share assuming the shares are retired. B Record the sale of 3 million shares at $12 per share. C Record the sale of 3 million shares at $7 per share. Record the purchase of 9 million shares at $10 per share assuming the shares are viewed as treasury stock. B Record the sale of 3 million shares at $12 per share. C Record the sale of 3 million shares at $7 per share. Shareholder's Equity ($ in millions) Retirement Treasury stock Paid-in capital: Total shareholders' 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

Step: 3

blur-text-image

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

Trucking Industry IRS Audit Techniques Guide

Authors: Internal Revenue Service

1st Edition

1304135640, 978-1304135643

More Books

Students also viewed these Accounting questions