Question

al LTE 2:04 X AC 112 Assignment #1.pdf ... AC 112 Ausi Punde 2.000 shared 2 Padded card So r ry for $12.00 S t reasury shares for 9.000 Declasse pere divided when we Pad the divided nared Id 1.000 n ewth. 1. Prepare the r e for the

Answer 1

Date	Account titles and explanation						Debit	Credit
Jan 1.	Cash						12000
	Common stock				(2000*5)			10000
	Paid-in capital in excess of par-common stock					(Plug)		2000
	(Common stock issued)
Jan 31.	Treasury stock						22000
	Cash							22000
	(Purchased own shares)
Feb 1.	Dividends				(Note:1)		25000
	Dividend payable							25000
	(Dividend declared)
Feb 28.	Dividend payable						25000
	Cash							25000
	(Dividend paid)
Mar 1.	Cash						12000
	Treasury stock			(22000/2000)*1000				11000
	Paid-in capital from treasury stock					(Plug)		1000
	(Treasury stock re-issued at above cost)
Mar 30.	Cash						9000
	Paid-in capital from treasury stock						1000
	Paid-in capital in excess of par-common stock					(Plug)	1000
	Treasury stock			(22000/2000)*1000				11000
	(Treasury stock re-issued at below cost)
Apr 1.	Dividends				(Note:2)		26000
	Dividend payable							26000
	(Dividend declared)
Apr 30.	Dividend payable						26000
	Cash							26000
	(Dividend paid)
May 1.	Land						11000
	Common stock					(1000*5)		5000
	Paid-in capital in excess of par-common stock					(Plug)		6000
Note:1
Dividend is declared on shares outstanding
Shares outstanding=Shares at the beginning+Shares issued-Shares purchased=50000+2000-2000=50000 shares
Dividend=50000*0.50=$ 25000
Note:2
Dividend is declared on shares outstanding
Shares outstanding=Shares at the beginning+Shares issued-Shares purchased+Treasury stock reissued=50000+2000-2000+2000=52000 shares
Dividend=52000*0.50=$ 26000