1 6,900,000 3 84,900,000 Corporations: Organization, Stock Transactions, and Dividends

Chapter 11 Corporations: Organization, Stock Transactions, and Dividends

527 EX 11-12 Treasury stock transactions OBJ. 4, 5 Irrigate Smart Inc. develops and produces spraying equipment for lawn maintenance and industrial uses. On February 17 of the current year, Irrigate Smart Inc. reacquired 50,000 shares of its common stock at 12 per share. On April 29, 31,000 of the reacquired shares were sold at 15 per share, and on July 31, 12,000 of the reacquired shares were sold at 17. a. Journalize the transactions of February 17, April 29, and July 31. b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? c. What is the balance in Treasury Stock on December 31 of the current year? d. How will the balance in Treasury Stock be reported on the balance sheet? EX 11-13 Treasury stock transactions OBJ. 4, 5 Biscayne Bay Water Inc. bottles and distributes spring water. On May 14 of the current year, Biscayne Bay Water Inc. reacquired 23,500 shares of its common stock at 75 per share. On September 6, Biscayne Bay Water Inc. sold 14,000 of the reacquired shares at 81 per share. The remaining 9,500 shares were sold at 72 per share on November 30. a. Journalize the transactions of May 14, September 6, and November 30. b. What is the balance in Paid-In Capital from Sale of Treasury Stock on December 31 of the current year? c. Where will the balance in Paid-In Capital from Sale of Treasury Stock be reported on the balance sheet? d. For what reasons might Biscayne Bay Water Inc. have purchased the treasury stock? EX 11-14 Reporting paid-in capital OBJ. 5 The following accounts and their balances were selected from the unadjusted trial bal- ance of Point Loma Group Inc., a freight forwarder, at October 31, the end of the current fiscal year: Common Stock, no par, 14 stated value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,480,000 Paid-In Capital from Sale of Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,000 Paid-In Capital in Excess of Par—Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . 210,000 Paid-In Capital in Excess of Stated Value—Common Stock . . . . . . . . . . . . . . . 480,000 Preferred 2 Stock, 120 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,400,000 Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,500,000 Prepare the Paid-In Capital portion of the Stockholders’ Equity section of the balance sheet using Method 1 of Exhibit 4. There are 375,000 shares of common stock authorized and 85,000 shares of preferred stock authorized. EX 11-15 Stockholders’ Equity section of balance sheet OBJ. 5 The following accounts and their balances appear in the ledger of Goodale Properties Inc. on June 30 of the current year: Common Stock, 45 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,060,000 Paid-In Capital from Sale of Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,000 Paid-In Capital in Excess of Par—Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . 272,000 Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,553,000 Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324,000 Prepare the Stockholders’ Equity section of the balance sheet as of June 30. Eighty thou- sand shares of common stock are authorized, and 9,000 shares have been reacquired.

b. 153,000 credit

b. 55,500 credit

Total paid-in capital, 13,615,000 Total stockholders’ equity, 23,676,000 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook andor eChapters. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.