Question

# Murry’s Inc. sold \$1M shares of \$25 par value common stock at \$32. Murry’s repurchased 100,000...

Murry’s Inc. sold \$1M shares of \$25 par value common stock at \$32. Murry’s repurchased 100,000 shares at \$50 per share and then sold 70,000 of those shares at \$55

Calculate total shareholder’s equity for Murry’s Inc.

Total Shareholder's Equity= \$30,850,000

Journal entries:

DR. Cash \$32,000,000

CR. Common Shares \$25,000,000

(Shares sold at \$32)

Computation:

1,000,000 x \$32 = \$32,000,000

1,000,000 x \$25 = \$25,000,000

\$32,000,000 - \$25,000,000 = \$7,000,000

DR,. Treasury Shares \$5,000,000

CR. Cash \$5,000,000

(Shares repurchased)

Computation:

100,000 x \$50 = \$5,000,000

DR. Cash \$3,850,000

CR. Treasury Shares \$3,500,000

(Shares resold)

Computation:

70,000 x 55 = \$3,850,000

70,000 x 50 = \$3,500,000

\$3,850,000 - \$3,500,000 = \$350,000

Calculation:

\$25,000,000 Common Shares

(\$1,500,000) Treasury Shares

\$30,850,000 Total Shareholder's Equity

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