Question

The following information pertains to JAE Corp. at January 1, Year 1: Common stock, $8 par, 13,000 shares authorized, 2,600 shares issued and outstanding Paid-in capital in excess of par, common stock Retained earnings $ 20,800 12,900 68, 100 JAE Corp. completed the following transactions during Year 1: 1. Issued 800 shares of $8 par common stock for $26 per share. 2. Repurchased 230 shares of its own common stock for $23 per share. 3. Resold 50 shares of treasury stock for $24 per share. Required a. How many shares of common stock were outstanding at the end of the period? Outstanding shares at the end of the period b. How many shares of common stock had been issued at the end of the period? Issued shares at the end of the period

Answer 1

JAE Corp. Requirement Journal Enteries Trans. Particulars Cash a/c Dr. To Common Stock To Paid in Capital in excess of par-CS 800 x 26 = 20800; 800 x 8 = 6400 Debit in $ Credit In $ 20800 6400 14400 2 Dr. 5290 Treasury Shares a/c To Cash 230 x 23 = 5290 5290 1200 1150 Cash a/c Dr. To Treasury Shares To Paid in Capital in excess of par - Treasury 50 x 24 = 1200; 50 x 23 = 1150 50 Requirement a & b Shares on Jan 1 Issued in Event 1 Treasury shares purchased event 2 Treasury shares resold Shares outstanding Shares issued ( 2600 + 800) 2600 800 -230 50 3220 3400 Stockholders Equity Section For period ending Dec 31 Year 1 Common Stock , $8 par , 13000 shares authorized, 3400 shares issued , 3220 shares issued Paid in Capital in excess of par - CS Paid in Capital in excess of par - Treasury Total Paid in Capital Retained Earnings 27200 27300 54550 68100 122650 -4140 118510 Treasury Shares ( 180 shares) Total Stockholders Equity

Cash Treasury Shares Paid in Capital in excess of par - Treasury Cash 50 5290 End Bal. Beg Bal. Common Stock PIC-CS Treasury Shares PIC - Treas. ? 6400 14400 1150 50 End Bal. Common Stock Beg Bal. Cash 27200 27200 20800 6400 End Bal. 27200 Paid in Capital in excess of par - CS Beg Bal. 12900 Cash 14400 27300 27300 27300 Cash Treasury Shares 5290 Cash End Bal. 5290 1150 4140 5290