Question

Required information [The following information applies to the questions displayed below.) Global Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $360,000 of net income, declared no dividends, and the following selected transactions occurred in the order given: a. Issued 120,000 shares of the common stock at $51 cash per share. b. Reacquired 21,000 shares at $46 cash per share. c. Reissued 8,000 shares from treasury for $47 per share. d. Reissued 8,000 shares from treasury for $45 per share. Required: 1. Indicate the account, amount, and direction of the effect on above transaction. (Enter any decreases to Assets, Liabilities and Stockholders' Equity with a minus sign.) Assets Liabilities + Stockholders' Equity

Answer 1

	Assets	Amount	=	Liabilities	Amount	+	Stockholder's Equity
A	Cash	$            61,20,000	=		0	+	Common Stock	$ 61,20,000
					0	+	Paid in Capital in excess of par - Common Stock	$                 -
B	Cash (21,000 Shares X $ 46)	$             -9,66,000	=		0	+	Treasury Stock	$ -9,66,000
C	Cash (8,000 Shares X $ 47)	$              3,76,000	=		0	+	Treasury Stock	$    3,68,000
					0	+	Paid in Capital in excess of par -Treasury Stock	$          8,000
D	Cash (8,000 Shares X $ 45)	$              3,60,000	=		0	+	Treasury Stock	$    3,68,000
					0	+	Paid in Capital in excess of par -Treasury Stock	$        -8,000