Accounting for Share Transactions The shareholders' equity section of the consolidated balance sheet of Wilson Industries appeared
Question:
Accounting for Share Transactions
The shareholders' equity section of the consolidated balance sheet of Wilson Industries appeared as follows at the beginning of the year:
Shareholders' Equity | |
Class A common stock, $0.02 par value; 20,000,000 shares authorized; | |
6,100,000 shares issued | $122,000 |
Additional paid-in-capital | 236,254,000 |
Retained earnings | 28,540,000 |
Currency translation adjustment | (4,824,000) |
Total equity | $260,092,000 |
The following events occurred sequentially during the year:
A 2-for-1 forward stock split was executed.
A ten percent stock dividend was distributed when the Wilson share price was $40 per share.
Treasury stock valued at $6,000,000 was repurchased when the Wilson share price was $25 per share.
Required
1. How many Class A common shares are outstanding following the above events?
Answer
2. What is the par value per share of the Class A common stock following the above events? Round to the nearest three decimal places.
$Answer
3. Prepare a spreadsheet to illustrate the financial effects associated with the above three share transactions.
Use a negative sign with answers to indicate a reduction in an account balance and with treasury stock repurchase and balance.
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach