Question

The following information pertains to JAE Corp. at January 1, Year 1:

Common stock, $11 par, 14,000 shares authorized, 2,800 shares issued and outstanding	$	30,800
Paid-in capital in excess of par, common stock		16,200
Retained earnings		71,400

JAE Corp. completed the following transactions during Year 1:

1. Issued 800 shares of $11 par common stock for $27 per share.
2. Repurchased 240 shares of its own common stock for $24 per share.
3. Resold 50 shares of treasury stock for $25 per share.

Required
a. How many shares of common stock were outstanding at the end of the period?
  

b. How many shares of common stock had been issued at the end of the period?

c. Prepare journal entries for these transactions and post them to T-accounts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
  

d. Prepare the stockholders’ equity section of the balance sheet reflecting these transactions. (Amounts to be deducted should be indicated with minus sign.)
  

Answer 1

JAE Corp. Journal Enteries Date Particulars Cash a/c To Common Stock To Paid-in capital in excess of par, common stock 30800 8800 Dr. Common Stock Bal Cash 39600 39600 Debit in $ Credit in $ 21600 8800 12800 Bal 39600 5760 Treasury Shares a/c Dr. To Cash (Treasury shares purchased) 5760 Paid-in capital in excess of par, common stock Bal 16200 Cash 12800 29000 29000 29000 Bal 1250 Cash a/c Dr. To Treasury Shares To Paid-in capital in excess of par, Treasury (Treasury shares sold) 1200 50 Cash Treasury Shares 5760 Cash Bal 5760 1200 4560 5760 Requirement a. January 1 Year 1 Issued Year 2 2800 800 3600 -240 3360 Paid-in capital in excess of par, Treasury stock Cash 50 Bal Treasury Shares purchased 50 50 Treasury Shares sold shares of common stock outstanding 3410 Requirement b. January 1 Year 1 Issued Year 2 2800 800 3600

Stockholders Equity Section For the period ending Year 2 Common stock, $11 par, 14,000 shares authorized, 3,600 shares issued and 3410 shares outstanding Paid-in capital in excess of par, common stock Paid-in capital in excess of par, Treasury stock Paid in Capital Retained Earnings 39600 29000 50 68650 71400 140050 -4560 135490 Treasury Shares Total Stockholders Equity