Professo William FO Spring 2016 2 The stockholders\' equity section of Kifer Ind

Question

Professo William FO Spring 2016 2 The stockholders' equity section of Kifer Industries" balance sheet follows: Common stock: $2.50 par value Paid-in capital: Excess over par Paid-in capital: Treasury stock Retained Earnings Treasury stock 560,000 49,800 37,600 $145,100 700 3,000) Total stockholders' equity Caleulate paid-in capital: treasury stock, retained earnings, and total stockholders' equity if all of the treasury stock were $3,000. a. sold for b. Calculate paid-in capital: treasury stock, retained earnings, and total stockholders' equity if all of the treasury stock were sold for S2,200.

Explanation / Answer

a.

Paid-in capital: treasury stock, retained earnings, and total stockholders equity when all of the treasury stock were sold for $3,600 is calculated as under:

a. b. Particulars Amount Common stock: $2.50 par value 60,000 60,000 60,000 Paid-in capital: Excess over par 49,800 49,800 49,400 Paid-in capital: Treasury stock 400 1,000 0 Retained Earnings 37,600 37,600 27,600 Treasury stock -3,000 0 0             Total stockholders equity 1,44,800 1,48,400 1,37,000 a. Cash 3,600    Treasury stock 3,000    Additional paid in capital 600 (For sold treasury stock) b. Cash 2,200    Additional paid in capital 800    Treasury stock 3,000 (For sold treasury stock)

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