Power Drive Corporation designs and produces a line of golf equipment and golf a

Question

Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2015. Power Drive has the following transactions affecting stockholders' equity in 2015.

   

Record each of these transactions.

Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2015. Power Drive has the following transactions affecting stockholders' equity in 2015.

Explanation / Answer

Answer :

To Share Premium A/c

(45000 shares issues @ 42 /Share, Par Value $1)

To Cash

( 4000 share purchase @ 45/share)

To Cash

( Dividend declare @1 $ /share, Shares 100000+45000-4000)

To Treasury Stock

( reissue 2000 shares @ $ 50)

Date Particulars Debit Credit 03/01 Cash A/c 1890000 To Share Capital A/c 45000

To Share Premium A/c

(45000 shares issues @ 42 /Share, Par Value $1)

1845000 05/10 Treasury Stock 180000

To Cash

( 4000 share purchase @ 45/share)

180000 07/01 Dividend a/c 141000

To Cash

( Dividend declare @1 $ /share, Shares 100000+45000-4000)

141000 10/21 Cash a/c 100000 To Additional Paid in Capital 10000

To Treasury Stock

( reissue 2000 shares @ $ 50)

90000

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