Question
Washington Company has the following stockholders' equity accounts at December 31st, 2014. Common Stock ($100 par value, authorized 8,000 shares) $480,000 Retained Earnings $294,000 1)
Washington Company has the following stockholders' equity accounts at December 31st, 2014.
Common Stock ($100 par value, authorized 8,000 shares) $480,000 Retained Earnings $294,000
1) Prepare entries in hournal form to record the following transactions, which took place during 2015: a) 280 shares of outstanding stock were purchased at $97 per share. (These are to be accounted for using the cost method). b) A $20 per share cash dividend was declared. c) The dividend declared in (b) above was paid. d) The treasuryshares pruchased in (a) above were resold at $102 per share. e) 500 shares of outstanding stock were purchased at $105 per share. f) 350 of the shares purchased in (e) above were resold at $96 per share.
2) Prepare the stockholders' equity section of Washington Company's balance sheet after giving effect to these transactions, assuming that the net income for 2015 was $94,000. State law requires restriction of retained earnings for the amount of treasury stock.
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