Question

The stockholders' equity account balances of ABC Company at January 1, 2023 are given below: January...

The stockholders' equity account balances of ABC Company at
January 1, 2023 are given below:

                                              January 1
Common stock  ...........................      448,000
Paid-in capital – common stock ..........      704,000
Retained earnings .......................      266,000

During January, ABC entered into the following transactions:

January 11:   Re-acquired 21,000 shares of its outstanding
              common stock by paying $19 per share

January 16:   Re-issued 2,200 of shares re-acquired on
              January 11 for $14 per share

January 21:   Re-issued 3,200 of shares re-acquired on
              January 11 for $24 per share

January 26:   Re-issued 4,300 of shares re-acquired on
              January 11 for $10 per share

Calculate the balance in the retained earnings account
after the above four transactions have been recorded.

Homework Answers

Answer #1
Balance in the Retained Earnings Account 232300
Workings:
Debit Credit
Jan 11 Treasury Stock 399000 =21000*19
       Cash 399000
Jan 16 Cash 30800 =2200*14
Retained earnings 11000
      Treasury Stock 41800 =2200*19
Jan 21 Cash 76800 =3200*24
      Treasury Stock 60800 =3200*19
      Paid in Capital from Treasury Stock 16000
Jan 26 Cash 43000 =4300*10
Paid in Capital from Treasury Stock 16000
Retained earnings 22700
      Treasury Stock 81700 =4300*19
Balance in the Retained Earnings Account 232300 =266000-11000-22700
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