Question

Exercise 10-9A Record common stock, treasury stock, and cash dividends (LO10-2, 10-4, 10-5) Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2021. Power Drive has the following transactions affecting stockholders' equity in 2021. March 1 Issues 59,000 additional shares of $1 par value common stock for $56 per share. May 10 Purchases 5,400 shares of treasury stock for $59 per share. June 1 Declares a cash dividend of $1.70 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) July 1 Pays the cash dividend declared on June 1. October 21 Resells 2,700 shares of treasury stock purchased on May 10 for $64 per share. Required: Record each of these transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list

Answer 1

Date		Account titles and explanation		Debit(in $)	Credit(in $)
	Mar-01	Cash(56,000 shares*$56)		31,36,000
		Common stock(56,000 shares*$1)			5,600
		Paid-in capital in excess of par value-common			30,80,000
	Mar-10	Treasury Stock(5400 shares*$59)		3,18,600
		Cash			3,18,600
	Jun-01	Retained earnings[(150,000+59,000)*$1.70]		2,70,300
		Dividend payable			2,70,300
	Jul-01	Dividend payable		2,70,300
		Cash			2,70,300
	Oct-21	Cash(2700 shares*$64)		1,72,800
		Treasury stock(2700 shares*$59)			1,59,300
		Paid in capital on sale of treasury stock			13,500