Treasury stock transactions. On January 1, 2013, Metco, Inc., reported 622,100 shares of $3 par value common

Question:

Treasury stock transactions. On January 1, 2013, Metco, Inc., reported 622,100 shares of $3 par value common stock as being issued and outstanding.

On March 15, 2013, Metco, Inc., purchased for its treasury 5,200 shares of its common stock at a price of $64 per share. On August 10, 2013, 1,900 of these treasury shares were sold for $76 per share. Metco's directors declared cash dividends of $2.10 per share during the second quarter and again during the fourth quarter, payable on June 30, 2013, and December 31, 2013, respectively. A 3% stock dividend was issued at the end of the year. There were no other transactions affecting common stock during the year.

Required:

a. Use the horizontal model (or write the entry) to show the effect of the treasury stock purchase on March 15, 2013.

b. Calculate the total amount of the cash dividends paid in the second quarter.

c. Use the horizontal model (or write the entry) to show the effect of the sale of the treasury stock on August 10, 2013.

d. Calculate the total amount of cash dividends paid in the fourth quarter.

e. Calculate the number of shares of stock issued in the stock dividend.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...