Question

Question 1 Stellar Company has the following stockholders' equity accounts at December 31, 2020. Common Stock ($100 par value, authorized 7,600 shares) Retained Earnings $505,600 291,700 Your answer is correct. Prepare entries in journal form to record the following transactions, which took place during 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) (1) 290 shares of outstanding stock were purchased at $98 per share. (These are to be accounted for using the cost method.) (2) A $22 per share cash dividend was declared. (3) The dividend declared in (2) above was paid. (4) The treasury shares purchased in (1) above were resold at $102 per share. (5) 550 shares of outstanding stock were purchased at $105 per share. (6) 340 of the shares purchased in (5) above were resold at $97 per share. Credit No. Account Titles and Explanation 1. Treasury Stock Debit 284200 28420 1048521 | Cash 2. Retained Eamings Dividends Payat 3. Dividends Payable Cash 4. Cash | Treasury Stock Paid-in Capital 1 5. Treasury Stock | Cash 6. Cash Paid-in Capital fra Retained Earings | Treasury Stock

Please solve for part 2 of the question - stockholders equity. Net Income for 2021 is $96,700.

Answer 1

Sr.No. Credit Debit $28,420 [290 x $98] $28,420 $1,04,852 [(5056-290) < $22] $1,04,852 [(5056-290) < $22] 3 $1,04,852 $1,04,852 $29,580 Account Title Treasury Stock Cash (To record repurchase of treasury Stock) Retained Earnings Dividend Payable (To record declaration of dividend) Dividend Payable Cash (To record payment of dividend) Cash Treasury Stock Paid in Capital in Excess of Par - Treasury Stock (To record issue of treasury stock) Treasury Stock Cash (To record repurchase of treasury Stock) Cash Paid in Capital in Excess of Par - Treasury Stock Retained Earnings Treasury Stock (To record issue of treasury stock) |[290 x $102 $28,420 [290 x $98] $1,160 [290 x $4] $57,750 [550 x $105] $57,750 [340 x $97] $32,980 $1,160 $1,560 $35,700 [340 x $105] Stellar Company Stockholders' Equity December 31 2021 Stockholders' Equity Common Stock Retained Earnings Total Paid in capital and retained earnings Less: Treasury Stock Total Stockholders' Equity $5,05,600 $2,81,988 ($291700-$104852-$1560+$96700] $7,87,588 ($22,050) ($57750-$35700] $7,65,538