Question

Bramble Company has the following stockholders’ equity accounts at December 31, 2017. Common Stock ($100 par value, authorized 8,600 shares) $455,900 Retained Earnings 311,600 Prepare entries in journal form to record the following transactions, which took place during 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (1) 300 shares of outstanding stock were purchased at $96 per share. (These are to be accounted for using the cost method.) (2) A $19 per share cash dividend was declared. (3) The dividend declared in (2) above was paid. (4) The treasury shares purchased in (1) above were resold at $103 per share. (5) 480 shares of outstanding stock were purchased at $105 per share. (6) 360 of the shares purchased in (5) above were resold at $95 per share.

o. Account Titles and Explanation Debit Credit 1. 2. 3. 4. 5. 6.

Prepare the stockholders’ equity section of Bramble Company’s balance sheet after giving effect to these transactions, assuming that the net income for 2018 was $101,600. State law requires restriction of retained earnings for the amount of treasury stock. (Enter account name only and do not provide descriptive information.) BRAMBLE COMPANY Stockholders’ Equity December 31, 2018For the Year Ended December 31, 2018For the Quarter Ended December 31, 2018 $     Additional Paid-in Capital    Capital Stock    Current Assets    Current Liabilities    Intangible Assets    Long-term Investments    Long-term Liabilities    Property, Plant and Equipment    Stockholders' Equity    Total Assets    Total Capital Stock    Total Current Assets    Total Current Liabilities    Total Intangible Assets    Total Liabilities    Total Liabilities and Stockholders' Equity    Total Long-term Investments    Total Long-term Liabilities    Total Paid-in Capital    Total Paid-in Capital and Retained Earnings    Total Property, Plant and Equipment    Total Stockholders' Equity     AddLess :     Additional Paid-in Capital    Capital Stock    Current Assets    Current Liabilities    Intangible Assets    Long-term Investments    Long-term Liabilities    Property, Plant and Equipment    Stockholders' Equity    Total Assets    Total Capital Stock    Total Current Assets    Total Current Liabilities    Total Intangible Assets    Total Liabilities    Total Liabilities and Stockholders' Equity    Total Long-term Investments    Total Long-term Liabilities    Total Paid-in Capital    Total Paid-in Capital and Retained Earnings    Total Property, Plant and Equipment    Total Stockholders' Equity     $ Click if you would like to Show Work for this question: Open Show Work

Answer 1

No.	Account Titles and Explanation	Debit	Credit
1.	Treasury stock (300*$96)	$28800
	Cash		$28800
	(To record treasury stock purchased)
2.	Retained earnings ($455900/100-300)*$19	$80921
	Dividend payable		$80921
	(To record cash dividend declared)
3.	Dividend payable	$80921
	Cash		$80921
	(To record cash dividend paid)
4.	Cash (300*$103)	$30900
	Treasury stock (300*$96)		$28800
	Paid in capital from Treasury stock (30900-28800)		$2100
	(To record treasury stock sold)
5.	Treasury stock (480*$105)	$50400
	Cash		$50400
	(To record treasury stock purchased)
6.	Cash (360*$95)	$34200
	Paid in capital from Treasury stock	$2100
	Retained earnings (37800-34200-2100)	$1500
	Treasury stock (360*$105)		$37800
	(To record treasury stock sold)

2)

BRAMBLE COMPANY Stockholders’ Equity December 31, 2018
Retained earnings	$330779
Common stock	455900
Total Additional Paid-in Capital	$786679
Less: Treasury stock	(12600)
Stockholders' equity	$774079

Retained earnings= $101600+311600-80921-1500= $330779

Treasury stock= $28800-28800+50400-37800= $12600

Retained earnings is restricted to $12600 for treasury stock.