[The following information applies to the questions displayed below. Worldwide C

Question

[The following information applies to the questions displayed below. Worldwide Company obtained a charter from the state in January that authorized 200,000 shares of common stock, $10 par value. During the first year, the company earned $38,700 and the following selected transactions occurred in the order given: a. Issued 65,000 shares of the common stock at $13 cash per share. b. Reacquired 2,500 shares at $16 cash per share from stockholders, the shares are now held in treasury. c. Reissued 1,250 of the shares in transaction (b) two months later at $19 cash per share. o 5023. value: 7 Required information 10.00 points Required: 1. Indicating the account, amount, and direction of the effect on above transaction. (Enter any decreases to account balances with a minus sign.) Assets Liabilities Stockholders' Eq b. C.

Explanation / Answer

Effect of transaction :

Assets = Liabilities    + Stockholder's equity a. Cash 845000 common stock 650000 Paid in capital in excess of par value 195000 b Cash (40000) Treasury stock (40000) c. Cash 23750 Treasury stock 20000 Paid in capital from sale of treasury stock 3750

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