Question

[The following information applies to the questions displayed below.] Worldwide Company obtained a charter from the...

[The following information applies to the questions displayed below.]

Worldwide Company obtained a charter from the state in January that authorized 200,000 shares of common stock, $10 par value. During the first year, the company earned $37,400, declared no dividends, and the following selected transactions occurred in the order given:

  1. Issued 52,000 shares of the common stock at $12 cash per share.
  2. Reacquired 1,200 shares at $15 cash per share from stockholders; the shares are now held in treasury.
  3. Reissued 600 of the shares in transaction (b) two months later at $18 cash per share.

Required:

1. Indicating the account, amount, and direction of the effect on above transaction. (Enter any decreases to Assets, Liabilities and Stockholders' Equity with a minus sign.)

Homework Answers

Answer #1
  • Requirement, as asked

Assets

Liabilities

Stockholder's Equity

a

Cash (52000 shares x $ 12)

$624,000

Common Stock (52000 shares x $ 10 par)

$520,000

Paid in Capital in Excess of Par - Common Stock (52000 shares x $ 2)

$104,000

b

Cash (1200 shares x $ 15)

($18,000)

Treasury Stock

($18,000)

c

Cash (600 shares x $ 18)

$10,800

Treasury Stock (600 shares x $ 15)

$9,000

Paid in Capital from Treasury Stock ($10800 - 9000)

$1,800

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