Lusaka, Inc. has 25,000 shares issued and outstanding. The shares were issued at $20 per share. The Par value is $1 per share. On Dec. 12, Lusaka repurchases 10,000 shares for cash of $18 per share.

1. What values would be shown on Lusaka's balance sheet for the issued shares prior to the repurchase?
2. Common stock:
3. Additional paid-in capital:
4. Record the journal entry for the share repurchase by choosing from the following account abbreviations: CASH = cash; CS = common stock; RE = retained earnings; TS = treasury stock; APIC = additional paid-in capital.
5. Debit:
6. Credit:
7. Calculate the total book value of common stock shares after the share repurchase:
8. How many shares are outstanding after the repurchase?
9. On Dec. 15, Lusaka declares a cash dividend of $1.25 per share to be paid on Jan. 25. What is the total amount of cash dividend that Lusaka will pay on Jan. 25? Hint: first determine the number of shares outstanding. Enter your answer without a $.

PART 2

For each activity described for the Flanders Co., indicate whether the cash flow is operating (O), investing (I), financing (F), or no cash flow (N).

1. Flanders purchases inventory with cash.
2. Flanders purchases a machine with cash.
3. Flanders acquires a machine by signing a note payable.
4. Flanders prepays an insurance policy that is effective for the next six months.
5. Flanders borrows $10,000 through a small business loan.
6. Flanders receives cash from a prior sale on the account.
7. Flanders acquires inventory on account.
8. Flanders’s employees work and earn $170,000 during July. Some wages are paid in July, and some remain payable at the end of the month.
9. Flanders makes an interest payment related to the note payable in (c).
10. Flanders issued a bond five years ago. Now the bond has matured and Flanders pays the face value.
11. Flanders pays a dividend to shareholders.
12. Flanders sells a delivery truck, reporting a gain of $2,000.

Answer rating: 100% (QA)

Answer Answer to Part 1 Amount shown in Balance Sheet prior to repurchase Common Stock 250001 Additi... View the full answer