Question

Puestion #3 M Mouse Corporation has the following stockholders' equity on December 31. 2018: Common Stock ($9-par value, 300,000 shares authorized, 200,000 shares issued and outstanding) Additional Paid-In Capital in Excess of Par Value Total Paid-In Capital Retained Earnings Total Stockholders' Equity 1,800,000 4,400,000 6,200,000 2,600,000 8,800,000 Part A: Use the given information to make the requested journal entries in Workpaper #3. You do not have to enter any information at Wileyplus for these questions. Part B: #1-6 Answer the questions by entering the appropriate amount at Wileyplus.

Answer 1

Treasury Stock : It is the stock which is reacquired by the company and has not been retired

When the treasury stock is issued above the cost at which the treasury stock is acquired, the difference between the issue price of treasury stock and cost of treasury stock is credited Paid in Capital Treasury Stock and treasury stock is credited at cost price

When the treasury stock is issued below the cost at which the treasury stock is acquired, the difference between the issue price and cost of treasury stock is debited Paid in Capital Treasury Stock to the amount available in the Paid in Capital Treasury Stock and the remaining is debited to retailed earnings account and treasury stock is credited at cost price.

Account Title Debit Credit Ans 1 Sr.No Treasury Stock Cash (To record purchase of treasury stock) Cash Treasury Stock Paid in Capital Treasury Stock (To record reissue of treasury stock) Cash Paid in Capital Treasury Stock Treasury Stock (To record reissue of treasury stock) Cash Paid in Capital Treasury Stock Retained Earnings Treasury Stock (To record reissue of treasury stock) Cash Retained Earnings Treasury Stock (To record reissue of treasury stock) Cash Paid in Capital Treasury Stock Treasury Stock (To record reissue of treasury stock) [20000 x $17] $3,40,000 1 $3,40,000 [4000 x $18] $68,000 [4000 x $17] $4,000 [4000 x $1] $72,000 2 [3000 x $16 [3000 x $1] $51,000 [3000x $17] $48,000 3 $3,000 $28,000 $1,000 $5,000 [2000 x $14] 4 $34,000 [2000 x $17] [1000 x $15] [1000 x $2] $17,000 [1000 x $17] $15,000 $2,000 5 [5000 x $19] $10,000 [5000 x $2] $85,000 5000 x $17] $95,000 Common Shares Authorised 300000 Ans 2 Common Shares Issued 2000000 Ans 3

Common Shares Issued 200000 Ans 3 Common Shares Outstanding : Ans 4 Common Shares issued Less: Stock Repurchased Add: Treasury Stock Reissued Common Shares Outstanding 2,00,000 (20,000) $15,000 1,95,000 $62,10,000 $25,93,000 $87,18,000 Total Paid in capital at the end of year 2019 Total Retained Earnings at the end of year 2019 Ans 5 See working Ans 6 below Total Stockholders' Equity at the end of year 2019 Ans 7 М Mouse Stockholders' Equity Dec 31, 2019 Common Stock ($9 par value, 300000 shares authorised, | 200000 shares issued and 1950000 outstanding $18,00,000 $44,00,000 $10,000 $62,10,000 $25,93,000 Additional Paid in Capital in Excess of Par Value Piad in Capital Treasury Stock [$4000-$3000-$1000+$10000] Total Paid in Capital Retained Earnings [$2600000 $5000 $2000] Less: Treasury Stock [5000 @$17] Total Stockholders' Equity -$85,000 $87,18,000