Global Marine obtained a charter from the state in January 2013, which authorize

Question

Global Marine obtained a charter from the state in January 2013, which authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $390,000 of net income and the following selected transactions occurred in the order given: a. Issued 120,000 shares of the common stock at $54 cash per share. b. Reacquired 24,000 shares at $49 cash per share. c. Reissued 9,500 shares from treasury for $50 per share. d. Reissued 9,500 shares from treasury for $48 per share. Required: 1. Indicating the account, amount, and direction of the effect (+ for increase and ? for decrease) for the above transaction. (Enter all amounts as positive values.)

Explanation / Answer

S.no. Assets Stockholders' equity a. Cash Account Common Stock capital increase by $ 600,000 Increase by $6480,000 Additional paid in capital increasse by $ 5880,000 b. Cash account Treasury Stock increase by $ 1176000 Decrease by $1176,000 c. Cash Account Treasury Stock decrease by $465500 Increase by $475000 Additional Paid in capital-Treasury Stock increase by $7500. d. Cash account Treasury Stock decrease by $465500 Increase by $ 456000 Additional Paid in capital-Treasury Stock decrease by $7500.

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