Case 1.bIn 2022, the following are the equity transactions and the corresponding journal entries made.1. On April 12, 2022, it was noted that Shipyard, Inc. purchased 4,000 its own commonstock at $25 per shareApr 15Treasury SharesRetained Earnings2. On Jun 15, the company sold 2,500 shares for $30 per share.Apr 12 CashTreasury SharesThe table shows the equity balances as of December 31, 20222022beginning BalanceCommon StockacquisitionSold Treasury StockEnding BalanceCommonStock1,130,0001,130,000Paid-in Commonstockdividenddistributable120,000capital inexcess ofpar300,000300,000TreasuryShares0-75,00050,000120,000 -25,000100,00075,000RetainedEarnings850,00075,000925,000100,00075,000Total2,400,000050,0002,450,000Requirement.(b) Evaluate whether the journal entries dated April 15, 2022 and June 12, 2022 are recordedin accordance with the recognition and measurement principles of treasury shares.(bl) If the journal entries are wrong, what will be the correct entries.(b2) Prepare the Stockholders' equity account balances.

The treasury stock includes the own shares of the company that are purchased from the shareholders.…

In 2022, the following are the equity transactions and the corresponding journal entries made. 1. On April 12, 2022, it was noted that Shipyard, Inc. purchased 4,000 its own common stock at $25 per share Apr 15 Treasury Shares Retained Earnings 2. On Jun 15, the company sold 2,500 shares for $30 per share. Apr 12 Cash Treasury Shares The table shows the equity balances as of December 31, 2022 2022 beginning Balance Common Stock acquisition Sold Treasury Stock Ending Balance Common Stock 1,130,000 1,130,000 Paid-in capital in excess of par 300,000 300,000 Common stock dividend distributable 120,000 Treasury Shares 0 -75,000 50,000 120,000 -25,000 100,000 75,000 Retained Earnings 850,000 75,000 925,000 100,000 75,000 Total 2,400,000 0 50,000 2,450,000 Requirement. (b) Evaluate whether the journal entries dated April 15, 2022 and June 12, 2022 are recorded in accordance with the recognition and measurement principles of treasury shares.

In 2022, the following are the equity transactions and the corresponding journal entries made. 1. On April 12, 2022, it was noted that Shipyard, Inc. purchased 4,000 its own common stock at $25 per share Apr 15 Treasury Shares Retained Earnings 2. On Jun 15, the company sold 2,500 shares for $30 per share. Apr 12 Cash Treasury Shares The table shows the equity balances as of December 31, 2022 2022 beginning Balance Common Stock acquisition Sold Treasury Stock Ending Balance Common Stock 1,130,000 1,130,000 Paid-in capital in excess of par 300,000 300,000 Common stock dividend distributable 120,000 Treasury Shares 0 -75,000 50,000 120,000 -25,000 100,000 75,000 Retained Earnings 850,000 75,000 925,000 100,000 75,000 Total 2,400,000 0 50,000 2,450,000 Requirement. (b) Evaluate whether the journal entries dated April 15, 2022 and June 12, 2022 are recorded in accordance with the recognition and measurement principles of treasury shares.

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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