Journalising Issue of Shares and Treasury Stock Operations
Common Stock, $10 par value, 250,00 shares authorized 200,000 shares issued and outstanding-$2,000,000Additional paid in capital for common stock -$1,000,000Retained Earnings – $800,000During year 2015 the following transaction took placeJune2, Issued additional 8,000 shares of common stock for $110,000Oct. 1 Management declared a cash dividend of $1per share to stockholders of October 15, 2015 and will be paid in November 1, 2015Nov. 1, The cash dividend is paidNov. 10 Samson company purchased 1,000 shares of its own for $20 a share in the marketDec. 1 Samson sold 600 shares of its treasury stock at $25 per shareDec. 20 Sold another 400 shares of its treasury stock at $12 per shareDec 31. Reported net income of $300,000 1.Prepare the journal entries to record the above transaction. Make sure to show the date of each transaction in your journal entry.2. Prepare stockholders’ equity section of the balance sheet as of December 31, 2015
3. Calculate earnings per share at the end of 2015. Common StockPar Value10Authorized Shares250000Shares Issued200000Shares Outstanding Value2000000Additional paid in capital for common stock 1000000Retained Earnings8000002-JunCash110000Common Stock80000Stock Premium300001-OctRetained Earnings208000Dividends Payable2080001-NovDividends Payable208000Cash20800010-NovTreasury Stock20000Cash200001-DecCash15000Paid in Capital3000Treasury Stock1200020-DecCash4800Paid in Capital3200Treasury Stock800031-DecProfit or Loss A/c (Income Statement)300000Retained Earnings300000