Question

Sage Financial Systems, Inc., has the following:
Common stock, 6,000,000 shares, $2 par value ......$ 12,000,000
Paid-in capital in excess of par .............. 42,000,000
Total paid-in capital .................. 54,000,000
Retained earnings .................. 10,000,000
Stockholders’ equity ................ $ 64,000,000
Overall market value of stock @ assumed market price of
$28 per share .................. $168,000,000
Book value per share = $64,000,000 ÷ 6,000,000 = $10.67
The company used cash to reacquire and retire 300,000 shares for $28 each. Prepare the stockholders’ equity section before and after this retirement of shares. Also prepare the journal entry.



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  • CreatedFebruary 20, 2015
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