On May 4, 2010, Docker, Inc., purchased 800 shares of

On May 4, 2010, Docker, Inc., purchased 800 shares of its own common stock in the market at a price of $18.25 per share. On September 19, 2010, 600 of these shares were sold in the open market at a price of $19.50 per share. There were 36,200 shares of Docker common stock outstanding prior to the May 4 purchase of treasury stock. A $0.35 per share cash dividend on the common stock was declared and paid on June 15, 2010.


Required:

Use the horizontal model (or write the entry) to show the effect on Docker’s financial statements of

a. the purchase of the treasury stock on May 4.

b. the declaration and payment of the cash dividend on June 15.

c. the sale of the treasury stock on September 19.


Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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...

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