Court Casuals has the following beginning balances in its stockholders\' equity
ID: 2489372 • Letter: C
Question
Court Casuals has the following beginning balances in its stockholders' equity accounts on January 1, 2015: Common Stock, $90,000; Additional Paid-in Capital, $4,200,000; and Retained Earnings, $2,000,000. Net income for the year ended December 31, 2015, is $700,000. Court Casuals has the following transactions affecting stockholders' equity in 2015
May
18
Issues 21,000 additional shares of $1 par value common stock for $40 per share.
May
31
Repurchases 4,000 shares of treasury stock for $40 per share.
July
1
Declares a cash dividend of $3 per share to all stockholders of record on July 15.
Hint: Dividends are not paid on treasury stock.
July
31
Pays the cash dividend declared on July 1.
August
10
Reissues 2,250 shares of treasury stock purchased on May 31 for $53 per share
May
18
Issues 21,000 additional shares of $1 par value common stock for $40 per share.
May
31
Repurchases 4,000 shares of treasury stock for $40 per share.
July
1
Declares a cash dividend of $3 per share to all stockholders of record on July 15.
Hint: Dividends are not paid on treasury stock.
July
31
Pays the cash dividend declared on July 1.
August
10
Reissues 2,250 shares of treasury stock purchased on May 31 for $53 per share
Explanation / Answer
Court casuals Statement of Stockholders' equity For the year ended 31st December, 2015 (in $) Common stock Additional paid in capital Retained Earnings Treasury Stock Total Stockholders' equity Balance Januray 1 90000 4200000 2000000 6290000 Issued Common stock 21000 819000 840000 Repurchase of treasury stock -160000 -160000 Cash dividends -333000 -333000 sale of treasury stock 29250 90000 119250 Net Income 700000 700000 Balance, December 31 7456250