Question

Keira’s Kites is authorized to issue 250,000 shares of $2 par value common and had 75,000...

Keira’s Kites is authorized to issue 250,000 shares of $2 par value common and had 75,000 shares issues and outstanding at Dec 31st 2019. stock. During 2020 Keira took part in the following transactions:

  1. Issued 40,000 shares of common stock at $50 per share
  2. Purchased 15,000 shares for the Treasury at $54 per share.
  3. Resold 4,000 shares of the Treasury Stock at $56 per share
  4. Resold 5,000 shares of the Treasury stock at $48 per share.

Required:

  1. Record the entries in the Journal
  2. What are the Issued Shares at 12/31 20?
  3. What are the Outstanding Shares?
  4. What is the Balance in Treasury Stock at 12/31/20?
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Homework Answers

Answer #1

a) Journal entries

No General Journal Debit Credit
a Cash (40000*50) 2000000
Common Stock (40000*2) 80000
Paid in capital in excess of par-Common 1920000
b Treasury Stock (15000*54) 810000
Cash 810000
c Cash (4000*56) 224000
Treasury Stock (4000*54) 216000
Paid in capital from sale of treasury Stock 8000
d Cash (5000*48) 240000
Paid in capital from sale of treasury Stock 8000
Retained earnings 22000
Treasury Stock (5000*54) 270000

2) Issued shares = 75000+40000 = 115000 Shares

3) Outstanding shares = 115000-6000 = 109000 Shares

4) Balance in treasury Stock = 6000*54 = 324000

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