National Supply’s shareholders’ equity included the following accounts at December 31, 2020: Shareholders’ Equity Common stock, 5 million shares at $1 par $ 5,000,000 Paid-in capital-excess of par 25,000,000 Retained earnings 86,500,000 Required: 1.National Supply reacquired shares of its common stock in two separate transactions and later sold shares. Prepare the entries for each of the transactions under each of two separate assumptions: the shares are (a) retired and (b) accounted for as treasury stock. February 15, 2021 Reacquired 320,000 shares at $8 per share. February 17, 2022 Reacquired 320,000 shares at $5.50 per share. November 9, 2023 Sold 215,000 shares at $7 per share (assume FIFO cost). 2.Prepare the shareholders’ equity section of national supply’s balance sheet at December 31, 2023, assuming the shares are (a) retired and (b) accounted for as treasury stock. Net income was $12 million in 2021, $14 million in 2022, and $16 million in 2023. No dividends were paid during the three-year period.
National Supply’s shareholders’ equity included the following accounts at December 31, 2020:
Shareholders’ Equity
Common stock, 5 million shares at $1 par $ 5,000,000
Paid-in capital-excess of par 25,000,000
Required:
1.National Supply reacquired shares of its common stock in two separate transactions and later sold shares. Prepare the entries for each of the transactions under each of two separate assumptions: the shares are (a) retired and (b) accounted for as
February 15, 2021 Reacquired 320,000 shares at $8 per share.
February 17, 2022 Reacquired 320,000 shares at $5.50 per share.
November 9, 2023 Sold 215,000 shares at $7 per share (assume FIFO cost).
2.Prepare the shareholders’ equity section of national supply’s
Complete this question by entering your answers in the tabs below.
Req 1 Retired
- Record the purchase of shares on February 15, 2021 for retirement.
- Record the purchase of shares on February 17, 2022 for retirement.
- Record the sale of shares on November 9, 2023.
Req 1 Treasury Stock
Journal entry worksheet
- Record the purchase of 320, 000 shares at $8 per share on February 15, 2021 that are accounted for as treasury stock.
- Record the purchase of 320,000 shares at $5.50 per share on February 17, 2022 that are accounted for as treasury stock.
- Record the sale of 215,000 shares at $7 per share (assume FIFO cost) on November 9, 2023.
Req 2
Prepare the shareholders’ equity section of National Supply’s balance sheet at December 31, 2023, assuming the shares are (a) retired and (b) accounted for as treasury stock. Net income was $12 million in 2021, $14 million in 2022, and $16 million in 2023. No dividends were paid during the three-year period. (Enter your answers in whole dollars.)
Shareholders’ Equity Retirement Treasury stock
Paid-in capital: ______________ ______________
_________________________ ______________ ______________
_________________________ ______________ ______________
_________________________ ______________ _______________
_________________________ ______________ _______________
_________________________ ______________ _______________
Total shareholders’ equity $ $
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