Question: Worldwide Company obtained a charter from the state in January that authorized 200,000 shares of common stock, $10 par value. During the first year, the company earned $38,400 and the following selected transactions occurred in the order given: a. Issued 62,000 shares of the common stock at $13 cash per share. b. Reacquired 2,200 shares at $16 cash per share from stockholders; the shares are now held in treasury. C. Reissued 1,100 of the shares in transaction (b) two months later at $19 cash per share. Required: 1. Indicating the account, amount, and direction of the effect on above transaction. a. Assets Liabilities Stockholders' Equity b. C. 2. Prepare journal entries to record each transaction. 3. Prepare the stockholders' equity section of the balance sheet at December 31. (TIP: Because this is the first year of operations, Retained Earnings has a zero balance at the beginning of the year)
Question: Worldwide Company obtained a charter from the state in January that authorized 200,000 shares of common stock, $10 par value. During the first year, the company earned $38,400 and the following selected transactions occurred in the order given: a. Issued 62,000 shares of the common stock at $13 cash per share. b. Reacquired 2,200 shares at $16 cash per share from stockholders; the shares are now held in treasury. C. Reissued 1,100 of the shares in transaction (b) two months later at $19 cash per share. Required: 1. Indicating the account, amount, and direction of the effect on above transaction. a. Assets Liabilities Stockholders' Equity b. C. 2. Prepare journal entries to record each transaction. 3. Prepare the stockholders' equity section of the balance sheet at December 31. (TIP: Because this is the first year of operations, Retained Earnings has a zero balance at the beginning of the year)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question:
Worldwide Company obtained a charter from the state in January that authorized 200,000 shares
of common stock, $10 par value.
During the first year, the company earned $38,400 and the following selected transactions
occurred in the order given:
a. Issued 62,000 shares of the common stock at $13 cash per share.
b.
Reacquired 2,200 shares at $16 cash per share from stockholders; the shares are now held
in treasury.
C. Reissued 1,100 of the shares in transaction (b) two months later at $19 cash per share.
Required:
1. Indicating the account, amount, and direction of the effect on above transaction.
a.
Assets Liabilities Stockholders' Equity
b.
C.
2. Prepare journal entries to record each transaction.
3. Prepare the stockholders' equity section of the balance sheet at December 31.
(TIP: Because this is the first year of operations, Retained Earnings has a zero balance at the
beginning of the year)
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