Question

Required information PA11-1 Analyzing Accounting Equation Effects, Recording Journal Entries, and Preparing a Partial Balance Sheet Involving Stock Issuance and Purchase Transactions [LO 11-2] (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 $460,000 of net income, declared no dividends, and the following selected transactions occurred in the order given: a. Issued 100,000 shares of the common stock at $61 cash per share. b. Reacquired 31,000 shares at $56 cash per share. c. Reissued 13,000 shares from treasury for $57 per share d. Reissued 13,000 shares from treasury for $55 per share.

Answer 1

Answer =1
Journal Entries
Transaction	Account Title and explanation	Debit	Credit
	Cash	$            61,00,000
a	Share Capital		$                 5,00,000
	Addittional paid in capital in excess of par - Common Stock		$               56,00,000
b	Treasury Stock (31000 X$ 56 Per Share)	$            17,36,000
	Cash		$               17,36,000
	(To Record the purchase of Treasury Stock)
c	Cash (13000 X $ 57 Per Shares)	$               7,41,000
	Treasurry Stock(13000 Shares X $ 56 Per shares)		$                 7,28,000
	Additional paid in capital - Treasurry Stock (13000 Shares X $ 1)		$                     13,000
	(To Record the sale of Treasurry Stock)
D	Cash (13000 X $ 55 Per Shares)	$               7,15,000
	Additional paid in capital - Treasurry Stock	$                  13,000
	Treasurry Stock(13000 Shares X $ 56 Per shares)		$                 7,28,000
	(To Record the sale of Treasurry Stock)
Answer =2
	GLOBAL MARINE
	BALANCE SHEET (PARTIAL)
	AT DECEMEBER 31
	STOCKHODER'S EQUITY
	Contributed Capital
	Share Capital (95,000 Shares X $ 5)	$               4,75,000
	Addittional paid in capital in excess of par - Common Stock	$            56,00,000
	Total Contributed Capital	$            60,75,000
	Retained Earnings	$               4,60,000
	Total	$            65,35,000
	Less: Treasury Stock	$             -2,80,000
	Total Stockholder's Equity	$            62,55,000