Question

he stockholders' equity section of KMG ple's balance sheet at December 31, 2018, was as follows: (Click the icon to view the balance sheet.) Read the resuirements Requirement a. Prepare the journal entry required on January 9, 2019, fon that date KMG repurchased 75,000 shares of treasury stock for $1,200,000. (Record debits first, then credits Exclude explanation Account i Requirements Requirement b. On March 23, 2019, KMG sold 8,000 of the treasury shares for $48 per share. Prepare the jour 0 Data Table a Prepare the journal entry required on January 9 2019. fon that date KMG repurchased 75,000 shares of treasury stock for $1.200.000 b. On March 23, 2010, KMG sold 8,000 of the treasury shares for 548 per share. Prepare the journal entry to record this transaction Prepare the journal entry required on June 30, 2019, assuming the firm sold 55.000 of the treasury shares for 5-20 per share. d. Prepare the stockholders guty section of KMG's balance sheet on December 31, 2019, assuming that the company reported net income of $20,000,000 and declared and paid a cash dividend of $2 20 per share year and $ Common Stock $5 par 2,500,000 shares authorized, 1.250,000 shares issued and outstanding) Additional Paid in Capital in Excess of Par. Common Retained Camings Total Stockholders' Equity 250.000 0,200,000 25.500.000 Print Done $ 30.650.000 Print Done

Answer 1

SOLUTION : A,B & C
	Date	General Journal	Debit	Credit
	January 09, 2019	Treasury Stock (75,000 Shars X $ 16)	$12,00,000
		Cash		$12,00,000
	March 23, 2019	Cash (8000 Shares X $ 48)	$3,84,000
		Treasury Stock(8000 Shares X $ 16)		$1,28,000
		Addittional paid in capital - Treasury Stock		$2,56,000
	June 30, 2019	Cash (55000 Shares X $ 26)	$14,30,000
		Treasury Stock(55000 Shares X $ 16)		$8,80,000
		Addittional paid in capital - Treasury Stock		$5,50,000
SOLUTION : D
	Working Notes:
		Retained earning statement
		Opening balance	$2,55,00,000
		Net Income	$2,00,00,000
		Less: Dividend Paid (12,38,000 Shares X $ 2.20)	$27,23,600
		(12,50,000 Shares -75,000 Share + 8000 Shares + 55,000 Shares)
		Closing Balance of Retained Earnings	$4,27,76,400
	SOLUTION:
		STOCKHOLDER'S EQUITY
		Contributed Capital
		Common stock , $ 5 par ( 2,500,000 Shares Authorized , 1,250,000 issued)	$              62,50,000
		Addittional paid in capital
		Paid in capial in excess of par - Common stock	$              82,00,000
		Paid in capial in from sale of treasurry stock	$                 8,06,000
		Total Contributed Capital	$           1,52,56,000
		Retained Earnings	$           4,27,76,400
		Total	$           5,80,32,400
		Less: Treasurry Stock (12,000 Shares X $ 16)	$               -1,92,000
		Total Stockholder's Equity	$           5,78,40,400