Questions for Intermediate Accounting Chapter 18, Problem 16E (6th edition) I am trying to understand how to determine the amounts used for Paid-in Cap-Excess of Par & Retained Earnings. I understand that $4m shares @ 25m = $6.25 per share, $4 mil goes to common stock and we have to credit Treasure Stock for the total $25m. So in turn that leaves $5.25 per share to account for. How from the information given do you determine that $4 per share is pd-in cap-excess of par & $1.25 is Retained Earnings?

INFORMATION GIVEN WITH THE EXERCISE PROBLEM:

In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in 2013 to discontinue accounting for reacquired shares as treasury stock. Instead, shares repurchased will be viewed as having been retired, reassuming the status of unissued shares. As part of the change, treasury shares held were reclassified as retired stock. At December 31, 2012, UMCs balance sheet reported the following shareholders equity:

Prepare the journal entry to effect the reclassification of treasury shares as retired shares.

	($ in millions)
Common stock, $1 par	$	200
Paid-in capitalexcess of par		800
Retained earnings		956
Treasury stock (4 million shares at cost)		(25	)
Total shareholders equity	$	1,931