On December 31, 2017, sharehclders\' equity accounts of Green Products Inc. (GPI

Question

On December 31, 2017, sharehclders' equity accounts of Green Products Inc. (GPI) had the balances shown below. GPI paid dividends of $4,500 on December 1, 2017 El (Click the icon to view the shareholders' equity balances.) 1. GPI sold 10,000 common shares on June 30, 2017. What was the average selling price of these shares if this was the only common-shares transaction during 2017? 2. Joumalize GPI's sale of the common shares on June 30, 2017 3. Based only on the above information, did GPl earn a profit or loss during 2017? Calculate the profit or loss Requirement 1. GPI sold 10,000 common shares on June 30, 2017. What was the average selling price of these shares if this was the only common-shares transaction during 2017? (Round your answer to the nearest cent.) The average selling price of the shares was $ per share. Requirement 2. Joumalize GPls sale of the common shares on June 30, 2017. (Record debits first, then credits. Explanations are not required.) Journal Entry 2017 Accounts Debit Credit June 30 Requirement 3. Based only on the information given and the calculations above, did GPl earn a profit or loss during 2017? Calculate the profit or loss. (Use parentheses or a minus sign for a net loss.) GPI hadaof Shareholders' equity balances 2017 2016 76,000 $ 56,000 84,000 81,000 Common shares Retained earnings shareholders' equity $160,000 $137,000 Print Done

Explanation / Answer

requirement 1:

The average selling price of the shares was $2 per share.

(since it is the only transaction, average price = (difference in common stock / number of shares sold)

=> (76,000 - 56,000) / 10,000

=>$2 per share.

requirement 2:

requirement 3:

GPI had a net profit of $7,500.

date accounts debit credit june 30 Cash a/c $20,000 ............To Common shares a/c $20,000

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