Question

On May 4, 2016, Docker, Inc., purchased 850 shares of its own common stock in the market at a price of $18.00 per share. On September 19, 2016, 450 of these shares were sold in the open market at a price of $21.20 per share. There were 34,000 shares of Docker common stock outstanding prior to the May 4 purchase of treasury stock. A $0.25 per share cash dividend on the common stock was declared and paid on June 15, 2016.

Required a. Use the horizontal model on Docker's financial statements for the purchase of the treasury stock on May 4, 2016. (Use amounts with +for increases and amounts with for decreases.) Balance Sheet Income Statement Assets Net Income b. Use the horizontal model on Docker's financial statements for the declaration and payment of the cash dividend on June 15, 2016·(Use amounts with + for increases and amounts with-for decreases.) Balance Sheet ncome Statement Assets Net Income c. Use the horizontal model on Docker's financial statements for the declaration and payment of the sale of the treasury stock on September 19, 2016. (Use amounts withfor increases and amounts with -for decreases.) ncome Sta Assets Net Income

Answer 1

May-04 Balance sheet Income statement Assets Liabilities Stockholders' equit Net income Revenues Expense Cash 15,300 Treasury stock $15,300 Treasury stock 850 x $18 15,300 Jun-15 Balance sheet Income statement Assets Liabilities Stockholders' equit Net income Revenues Expense Cash $8,287.50 cash dividend $8,287.50 Cash dividend (34,000-850) x $0.25 $8,287.50 Sep-19 Balance sheet Income statement Assets Liabilities Stockholders' equit Net income Revenues Expense Cash $9,540.00 $8,100.00 Treasury stock Paid in capital from sale of treasury stock $1,440.00 Treasury stock 450 x $18 = 8,100 Paid in capital from sale of treasury stock Cash 8,100+1,440 = 9,450 450 x (21.20-18) 1,440