Question

The following information pertains to JAE Corp. at January 1, 2018: Common stock, $10 par, 20,000 shares authorized, 2,000 shares issued and outstanding Paid-in capital in excess of par, common stock Retained earnings $20,000 15,000 82,000 JAE Corp. completed the following transactions during 2018: 1. Issued 3,000 shares of $10 par common stock for $25 per share. 2. Repurchased 500 shares of its own common stock for $26 per share. 3. Resold 200 shares of treasury stock for $30 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. Organize the transactions data in accounts under the accounting equation. d. Prepare the stockholders' equity section of the balance sheet reflecting these transactions. Include the number of shares authorized, issued, and outstanding in the description of the common stock. Complete this question by entering your answers in the tabs below. Req A and B Reg A and B ReqC Reg D Reg D How many shares of common stock were outstanding and issued at the end of the period? a. Outstanding shares at the end of the period b. Issued shares at the end of the period Req A and B Reqc >

Answer 1

Requirement a:

	Shares
Beginning	20,000
New issue	3,000
Treasury stock	-500
Sale of treasury stock	200
Outstanding shares at the end of the period	22,700

Requirement b:

Total shares issued are 20,000+3,000=23,000 shares

Requirement c:

JAE CORPORATION

Accounting equation for the year 2018

Event

Assets

=

Liabilities

+

Stockholders' Equity

Cash

Common stock

+

Paid-in capital in excess Common stock

+

Paid-in capital in excess Treasury stock

-

Treasury Stock

+

Retained Earnings

Beg. Bal.

=

+

$20,000

+

$15,000

+

-

+

$82,000

1

=

+

$30,000

+

$45,000

+

-

+

2

=

+

+

+

-

$13,000

+

3

=

+

+

+

$800

-

($5,200)

+

End. Bal.

=

+

$50,000

+

$60,000

+

$800

-

$7,800

+

$82,000

1. Common stock = 3,000 x $10 = $30,000

Paid-in capital in excess common stock = 3,000 x $15 (25 issue price-10 par) =$45,000

2. Treasury stock = 500 x $26 = $13,000

3. Sale of treasury stock = 200 x $ 30 = $6,000

Reduction from treasury stock = 200 x $26 = $ 5,200

Paid-in capital in excess treasury stock = 200 x $4 (30-26) = $800

Requirement d:

JAE CORPORATION
Balance Sheet (Partial)
As of December 31
Stockholders' Equity:
Common stock	$50,000
Paid-in capital in excess common stock	$60,000
Paid-in capital in excess Treasury stock	$800
Retained earnings	$82,000
Total paid in capital		$192,800
(Less): Treasury stock		($7,800)
Total stockholder's equity		$185,000