Question

At December 31, 2018, Mountain Corporation reported the stockholders' equity accounts shown here (with dollar amounts in millions, except per-share amounts). (Click the icon to view the data.) Mountain's 2019 transactions included (Click the icon to view the transactions.) Requirements 1. Journalize Mountain's transactions in parts b, c, d, and e. Explanations are not required. 2. What was the overall effect of these transactions (parts a-e) on Mountain's stockholders' equity? Requirement 1. Journalize Mountain's transactions in b, c, d, and e. Explanations are not required. (Enter amounts in millions as provided to you in the problem statement. Record debits first, then credits. Exclude explanations from any journal entries.) b. Issuance of 16 million shares of common stock for $11.50 per share. Data Table - X Journal Entry Accounts | More Info - X Date Debit Credit Common stock, $2.00 par value per share, 29 million shares issued Paid-in capital in excess of par value .... a. Net income, $448 million b. Issuance of 16 million shares of common stock for $11.50 per share c. Purchase of 10 million shares of treasury stock for $130 million d. Sold 7 million of the treasury shares purchased in partc for $105 million e. Declaration and payment of cash dividends of $30 million Retained earnings Treasury stock, at cost 346 Total stockholders' equity Print Done

Answer 1

1. Preparation of journal entries of mountain's transactions.

2. Computation of overall effect of these transactions on mountain's stockholders equity.

Refer the below images for more detailed solution with calculations.

Journalize beid eye. Mountain's transactions in parts Rear Sirement o (Amants in Millions) Date particolars Debit Credit $184 Cash All or To common stock Alc To paid in capital in excess of par value 132 *ape Shave Workings : * 16 million Shares & $1.50 per = $184 millions ** 16 million shares * $ 2.00 per = $ 32 millions Share all or $130 Treasury To stook cash Alc $ 130 cash $ 105 $ 9,* alc Dr TO Treasury Stock Alc To paid in capital from treasury Stack transactions $ 14 worrning : value of treasury stock No. of Shares value per Share = $ 130 million a to million = § 13 per share [3] sale value of treasury stuck = 7 millions & $13 per share = $91 millions

e. $30 Retained earnings To Dividends Alc or payable Ale $30 $30 Dividends To cash payable Alc or ale $30 & Cor) Retained earnings ale or To Cash Atc $ 30 $30 ®: What was the (parts a-e) overall effect Mountains of these stockholders transactions equity ? " on Revorgenen Requirement The overall effect on = net stock holders every increase of $577 [$448+ $32+ $152 - $130 +(491+14) $30]