On December 31, the records for Lakers Inc. provided the following data on stockholders' equity. -...

 

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On December 31, the records for Lakers Inc. provided the following data on stockholders' equity. - Common stock, $10 par, 30,000 shares issued: $300,000 - Additional paid-in capital on common stock, $0.30 per share: $9,000 - Treasury stock, 4,200 shares (cost $9.80 per share): $41,160 On that date, the stockholders vote to retire all of the treasury stock immediately and to purchase for direct retirement another 5,600 shares of common stock currently trading at $12.50 per share. Required a. Provide the journal entry to retire the 4,200 shares of treasury stock. Account Name Date Dec. 31 Common Stock Paid-in Capital in Excess of Par-Common Stock Retained Earnings Cash To retire treasury stock. Date Dec 31 Common Stock Account Name Paid-in Capital Treasury Stock Retained Earnings Cash To record purchase and retirement of common stock. Date Dec. 31 Treasury Stock Cash To record purchase of common stock. b. Provide the journal entry for the purchase and immediate retirement of the 5,600 shares of outstanding common stock. Note: For this entry, debit the account "Paid-in Capital" to include any amounts needed for the "Paid-in Capital in Excess of Par-Common Stock AND the Paid-in Capital- Retired Stock accounts. Change in stockholders' equity $ Dr. Part B Dr. 0 0 0 0 x $ 0 0 0 0 Cr. 0x 0x 0x 0x c. Assume instead for part b that the company holds the 5,600 shares in the treasury rather than retiring immediately. Record the journal entry. Account Name Dr. d. Determine the change in stockholders' equity after part b and then again after part c. Note: Indicate a decrease with a negative sign Part C 0x 0x Cr. 0x 0x On December 31, the records for Lakers Inc. provided the following data on stockholders' equity. - Common stock, $10 par, 30,000 shares issued: $300,000 - Additional paid-in capital on common stock, $0.30 per share: $9,000 - Treasury stock, 4,200 shares (cost $9.80 per share): $41,160 On that date, the stockholders vote to retire all of the treasury stock immediately and to purchase for direct retirement another 5,600 shares of common stock currently trading at $12.50 per share. Required a. Provide the journal entry to retire the 4,200 shares of treasury stock. Account Name Date Dec. 31 Common Stock Paid-in Capital in Excess of Par-Common Stock Retained Earnings Cash To retire treasury stock. Date Dec 31 Common Stock Account Name Paid-in Capital Treasury Stock Retained Earnings Cash To record purchase and retirement of common stock. Date Dec. 31 Treasury Stock Cash To record purchase of common stock. b. Provide the journal entry for the purchase and immediate retirement of the 5,600 shares of outstanding common stock. Note: For this entry, debit the account "Paid-in Capital" to include any amounts needed for the "Paid-in Capital in Excess of Par-Common Stock AND the Paid-in Capital- Retired Stock accounts. Change in stockholders' equity $ Dr. Part B Dr. 0 0 0 0 x $ 0 0 0 0 Cr. 0x 0x 0x 0x c. Assume instead for part b that the company holds the 5,600 shares in the treasury rather than retiring immediately. Record the journal entry. Account Name Dr. d. Determine the change in stockholders' equity after part b and then again after part c. Note: Indicate a decrease with a negative sign Part C 0x 0x Cr. 0x 0x

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a To retire the 4200 shares of treasury stock the journal entry would be Date Account Name Dr Cr Dec ... View the full answer