Plover Corporation had the following stockholders' equity accounts on January 1, 2014: Common Stock ($1 par) $400,000, Paid-in Capital in Excess of Par- Common Stock $500,000, and Retained Earnings $100,000. In 2014, the company had the following treasury stock transactions. Mar. 1 Purchased 5,000 shares at $7 per share. June 1 Sold 800 shares at $10 per share. Sept. 1

Chapter 11, Problem Set B #2

Plover Corporation had the following stockholders' equity accounts on January 1, 2014: Common Stock ($1 par) $400,000, Paid-in Capital in Excess of Par-Common Stock $500,000, and Retained Earnings $100,000. In 2014, the company had the following treasury stock transactions.

Mar. 1 Purchased 5,000 shares at $7 per share.

June 1 Sold 800 shares at $10 per share.

Sept. 1 Sold 1,700 shares at $9 per share.

Dec. 1 Sold 1,000 shares at $5 per share.

Plover Corporation uses the cost method of accounting for treasury stock. In 2014, the company reported net income of $80,000.


Instructions

(a) Journalize the treasury stock transactions, and prepare the closing entry at December 31, 2014, for net income.

(b) Open accounts for

(1) Paid-in Capital from Treasury Stock.

(2) Treasury Stock.

(3) Retained Earnings. Post to these accounts using J12 as the posting reference.

(c) Prepare the stockholders' equity section for Plover Corporation at December 31, 2014.


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...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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