P15-2B (Treasury Stock Transactions and Presentation) LLP Company had the following stock holders’ equity as of January 1, 2014. Common stock, $1 par value, 120,000 shares issued $ 120,000 Paid-in capital in excess of par—common stock 833,000 Retained earnings 408,000 Total stockholders’ equity $1,361,000 During 2014, the following transactions occurred. Feb. 16 LLP repurchased 5,000 shares of treasury stock at a price of $15 per share. Mar. 8 200 shares of treasury stock repurchased above were reissued at $16 per share. Apr. 11 800 shares of treasury stock repurchased above were reissued at $12 per share. May 8 2,000 shares of treasury stock repurchased above were reissued at $18 per share. Instructions (a) Prepare the journal entries to record the treasury stock transactions in 2014, assuming LLP uses the cost method. (b) Prepare the stockholders’ equity section as of June 30, 2014. Net income for the first 6 months of 2014 was $261,000.
P15-2B (
equity as of January 1, 2014.
Common stock, $1 par value, 120,000 shares issued $ 120,000
Paid-in capital in excess of par—common stock 833,000
Retained earnings 408,000
Total
During 2014, the following transactions occurred.
Feb. 16 LLP repurchased 5,000 shares of treasury stock at a price of $15 per share.
Mar. 8 200 shares of treasury stock repurchased above were reissued at $16 per share.
Apr. 11 800 shares of treasury stock repurchased above were reissued at $12 per share.
May 8 2,000 shares of treasury stock repurchased above were reissued at $18 per share.
Instructions
(a) Prepare the
cost method.
(b) Prepare the stockholders’ equity section as of June 30, 2014. Net income for the first 6 months of
2014 was $261,000.
P15-3B (Equity Transactions and Statement Preparation) Meriweather Company has two classes of
capital stock outstanding: 7%, $50 par preferred and $1 par common. At December 31, 2014, the following
accounts were included in stockholders’ equity.
Common Stock, 5,000,000 shares 5,000,000
Paid-in Capital in Excess of Par—Preferred Stock 350,000
Paid-in Capital in Excess of Par—Common Stock 68,700,000
Retained Earnings 12,780,000
The following transactions affected stockholders’ equity during 2015.
Mar 23 4-for-1 stock split (par value reduced to $0.25).
Apr 1 25,000 shares of common treasury stock purchased at $12 per share. Merriweather uses the cost
method.
Jun. 18 50,000 shares of preferred stock issued at $51 per share.
Aug. 18 15,000 shares of treasury stock reissued at $13 per share.
Oct. 1 120,000 shares of common stock issued at $14 per share.
Dec. 31 The preferred dividend is declared, and a common dividend of $0.15 per share is declared.
Dec. 31 Net income is $4,650,000.
Instructions
Prepare the stockholders’ equity section for Merriweather Company at December 31, 2015. Show all
supporting computations.
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