Question

Check my work Part 2 of 2 Required information PA11-1 Analyzing Accounting Equation Effects, Recording Journal Entries, and Preparing a Partial Balance Sheet Involving Stock Issuance and Purchase Transactions (LO 11-2] The following information applies to the questions displayed below) points Global Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $300,000 of net income, declared no dividends, and the following selected transactions occurred in the order given: a. Issued 120,000 shares of the common stock at $45 cash per share. b. Reacquired 15,000 shares at $40 cash per share. c. Reissued 5,000 shares from treasury for $41 per share. d Reissued 5,000 shares from treasury for $39 per share. References PA11-1 Part 3 3. Prepare the stockholders' equity section of the balance sheet at December 31. (Amounts to be deducted should be indicated by a minus sign.) GLOBAL MARINE Balance Sheet (Partial) At December 31 Stockholders' Equity Contributed Capital $ Common Stock Additional Paid-In Capital Common Stock 600,000 4,800,000

Answer 1

GLOBAL MARINE Balance Sheet (partial) At December 31 Stockholder's Equity Contributed Capital $ 600,000 Common Stock Additional Paid in Capital, Common Stock 4,800,000 Additional Paid in Capital, Treasury Stock $ Total Contributed Capital Retained Earnings $ 5,400,000 $ 300,000 $5,700,000 Total Less Treasury Stock at Cost Total Stockholder's Equity $ (200,000) 5,500,000

Working Notes Common Stock at par value 120000 *$ 5 =$ 600000 Additional paid in capital, Common Stock 1200000 ($45-$5) $4800000 Retained Earnings Beginning Balance Add : Net Income $ $ 300,000 Ending balance $ 300,000 Additional Paid in capital , Treasury Stock Total Amount received from re issue of Treasury Stock (5000 $41)(5000 $39) Less : Cost of Treasury Stock sold ( 10000 *$40) Additional Paid in capital, Treasury Stock 400,000 $(400,000) $ Balance of Treasury Stock at Cost (15000 10000)* $40 $ 200,000