Twin Towns, Inc., was authorized to issue 200,000 shares of common stock and ori
ID: 2346362 • Letter: T
Question
Twin Towns, Inc., was authorized to issue 200,000 shares of common stock and originally issued 100,000 shares of $10 par value stock at $18 per share. Subsequently, 25,000 shares were repurchased at $20, of which 10,000 were subsequently resold at $23.Assume the company's retained earnings balance is $120,000.
a.Prepare the stockholders' equity section of Twin Towns's balance sheet, including all appropriate disclosures.
Stockholders' equity:
(Click to select)Common stockRetained earningsAdditional paid-in capital on common stockAdditional paid-in capital on treasury stockTreasury stock
$
(Click to select)Common stockRetained earningsTreasury stockAdditional paid-in capital on treasury stockAdditional paid-in capital on common stock
(Click to select)Additional paid-in capital on treasury stockTreasury stockRetained earningsCommon stockAdditional paid-in capital on common stock
--------------------------------------------------------------------------------
Total paid-in capital
$
(Click to select)Common stockAdditional paid-in capital on common stockAdditional paid-in capital on treasury stockTreasury stockRetained earnings
--------------------------------------------------------------------------------
Total paid-in capital and retained earnings
$
(Click to select)Less: DividendsLess: Treasury stockAdd: DividendsCommon stockAdd: Treasury stock
--------------------------------------------------------------------------------
Total stockholders' equity
$
Explanation / Answer
Common stock- $10 par; 200,000 shares authorized, 100,000 issued, 15,000 shares in treasury
1,000,000
Additional paid in capital on common stock
800,000
Additional paid in capital on treasury stock
30,000
Total paid in capital
1,830,000
Retained earnings
120,000
Total paid in capital and retained earnings
1,950,000
Less cost of treasury stock
300,000
Total stockholders equity
1,650,000
Common stock- $10 par; 200,000 shares authorized, 100,000 issued, 15,000 shares in treasury
1,000,000
Additional paid in capital on common stock
800,000
Additional paid in capital on treasury stock
30,000
Total paid in capital
1,830,000
Retained earnings
120,000
Total paid in capital and retained earnings
1,950,000
Less cost of treasury stock
300,000
Total stockholders equity
1,650,000
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