Problem 13-54 In Intermediate Accounting II - Transactions that affected Barter
ID: 2364714 • Letter: P
Question
Problem 13-54 In Intermediate Accounting II - Transactions that affected Barter Company's stockholders' equity during 2013, the first year of operations, follow. a issued 30,000 shares of 9% preferred stock, $20 par, at $26. b issued 50,000 shares 0f $3 par common stock at $33. c Purchased and immediately retired 4,000 shares of preferred stock at $28. d Purchased 6,000 shares of its own common stock at $35. e Reissued 1,000 shares of treasury stock at $37. No dividends were declared in 2013, and net income for 2013 was $185,000. Record each of the transactions. Assume that treasury stock acquisitions are recorded at cost.Explanation / Answer
Answer:-
Assets = Liabilities + Stockholders' Equity
Treasury stock may have come from a repurchase or buyback from shareholders; or it may have never been issued to the public in the first place.A treasury stock or reacquired stock is stock which is bought back by the issuing company, reducing the amount of outstanding stock on the open market ("open market" including insiders' holdings).It's the portion of shares that a company keeps in their own treasury.
If you were to reduce a corporation's entire balance sheet into its most skeletal form, you would end up with the following accounting equation given at the top.