Question

Required information [The following information applies to the questions displayed below) 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 $500,000 of net income, declared no dividends, and the following selected transactions occurred in the order given: Issued 110.000 shares of the common stock at $65 cash per share b. Reacquired 35,000 shares at $60 cash per share. c. Reissued 15,000 shares from treasury for $61 per share. d. Reissued 15,000 shares from treasury for $59 per share. Required: 1. Indicate the account, amount, and direction of the effect on above transaction. (Enter any decreases to Assets, Liabilities and Stockholders' Equity with a minus sign.) Assets Liabilities Stockholders' Equity 1 2 3 of 3 Next >

Answer 1

ANSWER:

	Asset	Liabilities	Stockholders equity
a.	cash 110000 x $65 = +$7150000		Common stock 110000 x $5 = +$550000
			Additional paid in capital- common stock 110000 x ($65 - $5) = +$6600000
b.	cash 35000 x $60 = -$2100000		Treasury stock 35000 x $60 = -$2100000
c.	cash 15000 x $61 = +$915000		Treasury stock 15000 x $1 = +$15000
			Additional paid in capital- common stock 15000 x ($61 - $1) = +$900000
d.	cash 15000 x $59 = +$885000		Treasury stock 15000 x $1 = +$15000
			Additional paid in capital- common stock 15000 x ($59 - $1) = +$870000