National Supplys shareholders equity included the following accounts at December 31, 2023: Shareholders' Equity Common stock, 6
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Question:
National Supplys shareholders equity included the following accounts at December 31, 2023:
| Shareholders' Equity | |
|---|---|
| Common stock, 6 million shares at $1 par | $ 6,000,000 |
| Paid-in capitalexcess of par | 24,000,000 |
| Retained earnings | 88,000,000 |
Required:
- National Supply reacquired shares of its common stock in two separate transactions and later sold shares. Prepare the entries for each of the transactions under each of two separate assumptions: the shares are (a) retired and (b) accounted for as treasury stock.
| February 15, 2024 | Reacquired 340,000 shares at $7 per share. |
|---|---|
| February 17, 2025 | Reacquired 340,000 shares at $4.50 per share. |
| November 9, 2026 | Sold 230,000 shares at $6 per share (assume FIFO cost). |
2. Prepare the shareholders equity section of National Supplys balance sheet at December 31, 2026, assuming the shares are (a) retired and (b) accounted for as treasury stock. Net income was $13 million in 2024, $15 million in 2025, and $17 million in 2026. No dividends were paid during the three-year period.
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