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 February 17, 2022 November 9, 2023 Reacquired 300,000 shares at $9 per share. Reacquired 300,000 shares at $6.50 per share. Sold 200,000 shares at $8 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 $20 million in 2021, $21 million in 2022, and $22 million in 2023. No dividends were paid during the three-year period. Complete this question by entering your answers in the tabs below
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 February 17, 2022 November 9, 2023 Reacquired 300,000 shares at $9 per share. Reacquired 300,000 shares at $6.50 per share. Sold 200,000 shares at $8 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 $20 million in 2021, $21 million in 2022, and $22 million in 2023. No dividends were paid during the three-year period. Complete this question by entering your answers in the tabs below
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![**National Supply’s Shareholders’ Equity Analysis**
**Shareholders’ Equity Accounts at December 31, 2020:**
- **Common stock, 4 million shares at $1 par**: $4,000,000
- **Paid-in capital—excess of par**: $24,000,000
- **Retained earnings**: $85,000,000
---
**Tasks:**
1. **Journal Entries for Stock Transactions**
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 the following assumptions: (a) shares are retired, (b) shares are accounted for as treasury stock.
**Transactions:**
- **February 15, 2021**: Reacquired 300,000 shares at $9 per share.
- **February 17, 2022**: Reacquired 300,000 shares at $6.50 per share.
- **November 9, 2023**: Sold 200,000 shares at $8 per share (assume FIFO cost).
2. **Shareholders’ Equity Section Preparation**
Prepare the shareholders’ equity section of the balance sheet at December 31, 2023, under the conditions that the shares are: (a) retired, (b) accounted for as treasury stock. Note that net income was $20 million in 2021, $21 million in 2022, and $22 million in 2023, with no dividends paid during the three-year period.
---
**Instructions for Completion:**
- Provide entries for each transaction given in the requirements. Assume shares are retired unless stated otherwise.
- If no entry is required, select "No journal entry required."
---
**Journal Entry Worksheet Example:**
- **Record the purchase of shares on February 15, 2021, for retirement:**
- **Date**: February 15, 2021
- **General Journal**:
- [Debit and Credit entries for the transaction are to be filled out based on the transaction details.]
*Ensure debits are entered before credits in the worksheet.*](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1de229ca-d610-4e0a-8ba8-f4b8dab4ff7a%2F169183ab-bdb8-4b2c-9b2a-1c681d43bc81%2Fdlwvj0h_processed.png&w=3840&q=75)
Transcribed Image Text:**National Supply’s Shareholders’ Equity Analysis**
**Shareholders’ Equity Accounts at December 31, 2020:**
- **Common stock, 4 million shares at $1 par**: $4,000,000
- **Paid-in capital—excess of par**: $24,000,000
- **Retained earnings**: $85,000,000
---
**Tasks:**
1. **Journal Entries for Stock Transactions**
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 the following assumptions: (a) shares are retired, (b) shares are accounted for as treasury stock.
**Transactions:**
- **February 15, 2021**: Reacquired 300,000 shares at $9 per share.
- **February 17, 2022**: Reacquired 300,000 shares at $6.50 per share.
- **November 9, 2023**: Sold 200,000 shares at $8 per share (assume FIFO cost).
2. **Shareholders’ Equity Section Preparation**
Prepare the shareholders’ equity section of the balance sheet at December 31, 2023, under the conditions that the shares are: (a) retired, (b) accounted for as treasury stock. Note that net income was $20 million in 2021, $21 million in 2022, and $22 million in 2023, with no dividends paid during the three-year period.
---
**Instructions for Completion:**
- Provide entries for each transaction given in the requirements. Assume shares are retired unless stated otherwise.
- If no entry is required, select "No journal entry required."
---
**Journal Entry Worksheet Example:**
- **Record the purchase of shares on February 15, 2021, for retirement:**
- **Date**: February 15, 2021
- **General Journal**:
- [Debit and Credit entries for the transaction are to be filled out based on the transaction details.]
*Ensure debits are entered before credits in the worksheet.*
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