Question

Charmed, Inc. has 7,000 shares of treasury stock which it purchased for $12?/share. It later resold...

Charmed, Inc. has 7,000 shares of treasury stock which it purchased for $12?/share. It later resold 2,500 of those shares for $20 /share. The amount to be credited to Paid?in Capital?Treasury Stock? is:

A.

$84,000.

B.

$56,000.

C.

$20,000.

D.

$50,000.

The Betta Group had net income of $39,000. Accounts Receivable increased by $5,500?; accounts payable decreased by $3,500. Depreciation expense for the year was $ 500 Additional transactions? include: the purchase of land in exchange for stock $50,000?; the sale of treasury stock $4,000?; issued bonds $3,000?; acquired a building by issuing a note $80,000. Using the indirect? method, the net increase? (decrease) in cash for the year? is:

A.

$37,500

B.

?$(94,500?)

C.

$30,500

D.

?$(21,500?)

Homework Answers

Answer #1

1) Treasury stock sale journal entry :

Date accounts & explanation debit credit
Cash (2500*20) 50000
Treasury stock (2500*12) 30000
Paid in capital from sale of treasury stock 20000

So answer is c) $20000

2) Statement of cash flow :

Cash flow from operating activities
Net income 39000
Adjustment to reconcile net income
Depreciation expense 500
Account receivable increase -5500
Account payable decrease -3500
Net cash flow from operating activities 30500
Cash flow from investing activities
Cash flow from financing activities
Sale of treasury stock 4000
Issue bonds 3000
Net cash flow from financing activities 7000
Net cash increase (decrease) in cash 37500

So answer is a) $37500

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