Question

Chapter 18 Help Save Bar Update Apple ID Setting Some account services laten you sign in National Supply's shareholders' equity included the following accounts at December 31, 2020: Shareholders' Equity Connon stock, 8 million mhares at $1 par Paid-in capital-excess of par Retained earnings points $ 8,000,000 64,000,000 79,000,000 eBook Required: 1. National Supply reacquired shares of its common stock in two separate transactions and later sold shares. Prepare the entries for each of the transactions under each of two separate assumptions: the shares are(a) retired and (b) accounted for as treasury stock. February 15, 2021 February 17, 2022 November 9. 2023 Reacquired 220,000 shares at 11 per share. Reacquired 220,000 whares at $8.50 per share. Sold 140,000 shares at $10 per share ( ne VITO cost 2. Prepare the shareholders' equity section of National Supply's balance sheet at December 31, 2023, assuming the shares are al retired and (b) accounted for as treasury stock. Net income was $16 million in 2021, $17 million in 2022, and $18 million in 2023. No dividends were paid during the three-year period. Complete this question by entering your answers in the tabs below. Red Retired Treasury Stock Reg 2 Prepare the entry for each of the transactions given in the requirement above. Assume shares are retired. (If no entry is required for a transaction/event, select "No journal entry required in the first account held.) View transaction list Journal entry worksheet < Prev 8 of 10 Next >

Answer 1

Solution:

1 (a) Shares are reacquired by retiring of stock
Date		General Journal				Debit	Credit
February 15, 2021		Common Stock				220,000
		Paid in Capital excess of par				2,200,000
		Cash					2,420,000
February 17, 2022		Common Stock				2,20,000
		Paid in Capital excess of par				1,650,000
		Cash					1,870,000
November 9, 2023		Cash				1,400,000
		Common stock					1,40,000
		Paid in capital excess of par					1,260,000

1 (b) Shares are reacquired by Treasury Stock
Date		General Journal				Debit	Credit
February 15, 2021		Treasury Stock				2,420,000
		Cash					2,420,000
February 17, 2022		Treasury Stock				1,870,000
		Cash					1,870,000
November 9, 2023		Cash (140,000 * $10)				1,400,000
		Paid in Capital excess of par				1,40,000
		Treasury Stock (140,000 * $11)					1,540,000

2 (a) Shares are reacquired by retiring of stock
Statement of Shareholder's Equity
Paid in Capital:
Common Stock
7,700,000 shares issued and outstanding						7,700,000
Paid in Capital in excess of par						61,410,000	69,110,000
Retained Earnings						79,000,000
Profit for last 3 years						51,000,000	130,000,000
Total Shareholder's Equity							199,110,000

2 (b) Shares are reacquired by Treasury Stock
Statement of Shareholder's Equity
Paid in Capital:
Common Stock
8,000,000 shares issued and 7,700,000 shares outstanding						8,000,000
Paid in Capital in excess of par						6,860,000	71,860,000
Retained Earnings						79,000,000
Profit for last 3 years						51,000,000	130,000,000
Less: Treasury Stock (80,000 * $11) + (220,000 * $8.5)							-2,750,000
Total Shareholder's Equity							199,110,000