Journalizing treasury stock transactions and reporting stockholders’ equitySouthern Amusements Corporation had the following stockholders’ equity on November 30:On December 30, Southern purchased 200 shares of treasury stock at $15 per share.RequirementsJournalize the purchase of the treasury stock.Prepare the stockholders’ equity section of the balance sheet at December 31, 2018. Assume the balance in retained earnings is unchanged from November 30.How many shares of common stock are outstanding after the purchase of treasury stock? Stockholders' EquityPaid-In Capital:Common Stock-$5 Par Value; 1,300 sharesauthorized, 250 shares issued and outstanding$ 1,250Paid-In Capital in Excess of Par-Common3,750Total Paid-In Capital5,000Retained Earnings50,000Total Stockholders' Equity$ 55,000

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Answered: Stockholders' Equity Paid-In Capital:…

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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Journalizing treasury stock transactions and reporting stockholders’ equity

Southern Amusements Corporation had the following stockholders’ equity on November 30:

On December 30, Southern purchased 200 shares of treasury stock at $15 per share.

Requirements

Journalize the purchase of the treasury stock.
Prepare the stockholders’ equity section of the balance sheet at December 31, 2018. Assume the balance in retained earnings is unchanged from November 30.
How many shares of common stock are outstanding after the purchase of treasury stock?

Stockholders' Equity
Paid-In Capital:
Common Stock-$5 Par Value; 1,300 shares
authorized, 250 shares issued and outstanding
$ 1,250
Paid-In Capital in Excess of Par-Common
3,750
Total Paid-In Capital
5,000
Retained Earnings
50,000
Total Stockholders' Equity
$ 55,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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