The following excerpt is from an article reported in an online issue of Bloomberg. ElectriCar Corp. said it will repurchase $3.6 billion of its shares to reduce dilution from recent stock grants to executives. The par amount per share for ElectriCar's common stock is $0.01. Paid-in capital-excess of par is $7.19 per share on average. The market price was $25.0. Required: 1. Suppose ElectriCar Corp. reacquires 130.00 million shares through repurchase on the open market at $25.00 per share. Prepare the appropriate journal entry to record the purchase. ElectriCar Corp. considers the shares it buys back to be treasury stock. 2. Suppose ElectriCar Corp. considers the shares it buys back to be retired rather than treated as treasury stock. Prepare the appropriate journal entry to record the purchase.
The following excerpt is from an article reported in an online issue of Bloomberg. ElectriCar Corp. said it will repurchase $3.6 billion of its shares to reduce dilution from recent stock grants to executives. The par amount per share for ElectriCar's common stock is $0.01. Paid-in capital-excess of par is $7.19 per share on average. The market price was $25.0. Required: 1. Suppose ElectriCar Corp. reacquires 130.00 million shares through repurchase on the open market at $25.00 per share. Prepare the appropriate journal entry to record the purchase. ElectriCar Corp. considers the shares it buys back to be treasury stock. 2. Suppose ElectriCar Corp. considers the shares it buys back to be retired rather than treated as treasury stock. Prepare the appropriate journal entry to record the purchase.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Oo.179.
Subject :- Account
Transcribed Image Text:The following excerpt is from an article reported in an online issue of Bloomberg.
ElectriCar Corp. said it will repurchase $3.6 billion of its shares to reduce dilution from recent stock grants to executives.
The par amount per share for ElectriCar's common stock is $0.01. Paid-in capital-excess of par is $7.19 per share on
average. The market price was $25.0.
Required:
1. Suppose ElectriCar Corp. reacquires 130.00 million shares through repurchase on the open market at $25.00 per share.
Prepare the appropriate journal entry to record the purchase. ElectriCar Corp. considers the shares it buys back to be
treasury stock.
2. Suppose ElectriCar Corp. considers the shares it buys back to be retired rather than treated as treasury stock. Prepare
the appropriate journal entry to record the purchase.
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