1.
Date | Account title and explanations | Debit | Credit |
Mar 31 | No entry | ||
Apr 1 | Treasury stock | $74,000 | |
Cash [2,000 x $37] | $74,000 | ||
[Purchase of own shares] | |||
July 1 | Cash [1,000 x $48] | $48,000 | |
Treasury stock [1,000 x $37] | $37,000 | ||
Additional paid-in capital from treasury stock | $11,000 | ||
[Re-issue of treasury stcok] | |||
July 1 | Cash [20,000 x $47] | $940,000 | |
Common stock [20,000 x $8] | $160,000 | ||
Additional paid-in capital - common stock | $780,000 | ||
[Issued common shares for cash] | |||
Dec 1 | Retained earnings | $69,000 | |
Dividends payable-common [69,000 x $1] | $69,000 | ||
[Declaration of cash dividends] | |||
Dec 22 | Retained Earnings [6,900 x $48] | $331,200 | |
Common Stock dividend distributable [6,900 x $8] | $55,200 | ||
Paid-in Capital in Excess of Par-Common | $276,000 | ||
[Declaration of stock dividends] | |||
Dec 30 | Dividends payable-common | $69,000 | |
Cash | $69,000 | ||
[Payment of dividend] |
2.
Embassy Corporation | |
Income statement (partial) | |
For the year ended December 31,2017 | |
Income from continuing operations | $220,400 |
Income(loss) from discontinuing operations: | |
Loss on discontinued operations | ($47,400) |
Net income | $173,000 |
EPS (173,000/59,000*) | $2.93 |
3.
Embassy Corporation | ||
Statement of retained earnings | ||
For the year ended December 31,2017 | ||
Retained Earnings as on Dec 31,2017 | $1,700,000 | |
Add: Net income | $173,000 | |
Subtotal | $1,873,000 | |
(Less): Dividends | ||
Cash dividends | $69,000 | |
Stock dividends | $331,200 | ($400,200) |
Retained Earnings as on Dec 31,2018 | $1,472,800 |
Calculations:
*
Calculations | Weights | |
Jan 1 - Mar 31 | 50,000 x 3/12 | 12,500 |
Apr 1 -July 1 | 48,000 x 3/12 | 12,000 |
July 1 - Dec 31 | 69,000 x 6/12 | 34,500 |
Total weighted average no. of shares | 59,000 |
Common shares outstanding | |
Beginning | 40,000 |
March 1 (5 for 4 stock split) | 50,000 |
Apr 1 (Treasury stock) | -2,000 |
Balance | 48,000 |
July 1 (Re-issue of treasury stock) | 1,000 |
July 1 (New issue) | 20,000 |
Balance | 69,000 |
The stockholders' equity of Embassy Corporation at December 31, 2017, is shown as follows. Stockholders' equity:...
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