Global Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $400,000 of net income, declared no dividends, and the following selected transactions occurred in the order given:Issued 100,000 shares of the common stock at $55 cash per share.Reacquired 25,000 shares at $50 cash per share.Reissued 10,000 shares from treasury for $51 per share.Reissued 10,000 shares from treasury for $49 per share.Questions:1. Indicate the account, amount, and direction of the effect on above transaction. (Enter any decreases to Assets, Liabilities and Stockholders' Equity with a minus sign.)2. Prepare journal entries to record each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)3. Prepare the stockholders’ equity section of the balance sheet at December 31. (Amounts to be deducted should be indicated by a minus sign.)

The stockholders' equity section of a balance sheet represents the amount of capital given to a…

Answered: Global Marine obtained a charter from…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Global Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $400,000 of net income, declared no dividends, and the following selected transactions occurred in the order given:

Issued 100,000 shares of the common stock at $55 cash per share.
Reacquired 25,000 shares at $50 cash per share.
Reissued 10,000 shares from treasury for $51 per share.
Reissued 10,000 shares from treasury for $49 per share.

Questions:

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

2. Prepare journal entries to record each transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

3. Prepare the stockholders’ equity section of the balance sheet at December 31. (Amounts to be deducted should be indicated by a minus sign.)

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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