1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Annette [7]
3 years ago
8

LLP Company had the following stockholders’ equity as ofJanuary 1, 2017.

Business
1 answer:
mihalych1998 [28]3 years ago
6 0

Complete Question:

Clemenson LLP Company had the following stockholders’ equity as of January 1, 2017.

Common stock, $1 par value, 120,000 shares issued$120,000

Paid-in capital in excess of par—common stock 833,000

Retained earnings 408,000

Total stockholders’ equity$1,361,000

During 2017, the following transactions occurred.

Feb. 16: LLP repurchased 5,000 shares of treasury stock at a price of $15 per share.

Mar. 8: 2,000 shares of treasury stock repurchased above were reissued at $16 per share.

Apr. 11: 800 shares of treasury stock repurchased above were reissued at $12 per share.

May. 8: 2,000 shares of treasury stock repurchased above were reissued at $18 per share

Instructions:

a. Prepare the journal entries to record the treasury stock transactions in 2017, assuming Clemson uses the cost method.

b. Prepare the stockholders’ equity section as of April 30, 2017. Net income for the first 4 months of 2017 was $130,000.

Answer:

Clemson LLP Company

a. Journal Entries

Feb. 16:

Debit Treasury Stock account $75,000

Credit Cash Account $75,000

To record the repurchase of 5,000 shares of treasury stock at a price of $15 per share.

March 8:

Debit Cash Account $32,000

Credit Treasury Stock account $32,000

To record the resale of 2,000 shares of treasury stock at $16 per share.

April 11:

Debit Cash Account $9,600

Credit Treasury Stock account $9,600

To record the resale of 800 shares of treasury stock at $12 per share.

May 8:

Debit Cash Account $36,000

Credit Treasury Stock account $36,000

To record the resale of 2,000 shares of treasury stock at $18 per share.

b. Stockholders' Equity Section as of April 30, 2017:

Common stock, $1 par value, 120,000 shares issued  $120,000

Treasury Stock, 200 shares                                                 2,600

Paid-in capital in excess of par—common stock             833,000

Retained earnings                                                            538,000

Total stockholders’ equity                                           $1,493,600

Explanation:

a) Data and Calculations:

Stockholders’ equity as of January 1, 2017:

Common stock, $1 par value, 120,000 shares issued  $120,000

Paid-in capital in excess of par—common stock             833,000

Retained earnings                                                            408,000

Total stockholders’ equity                                            $1,361,000

b) Retained Earnings:

Jan. 1, 2017 balance $408,000

Net Income               $130,000

April 30, 2017 bal.    $538,000

c) Since Clemenson accounts for the Treasury Stock transactions using the cost method, it means that all treasury transactions are recorded directly in the Treasury Stock account based on their cost and not the par value.  This method of using the cost is one of the two methods for accounting for treasury stock transactions.  The other method, which Clemenson can use is the par value method.  Under this second method, Clemenson will record the above and below par value differences in the Paid-in Capital in excess of par account instead of the Treasury Stock account.  While the treasury stock account is a contra account to the Common Stock account, in Clemenson's case, the Treasury Stock balance is not a debit but a credit balance.

You might be interested in
What is an example of what a business would write a check for​
Helga [31]

Answer:

To pay in taxes, to purchase goods to make things if the business is a factory etc. hope this helps

Explanation:

7 0
3 years ago
Direct Method Question (2026, Current Period): 2026 2025 A/R 49,000 23,000 Prepaid Insurance 15,000 3,000 Salaries Payable 13,00
hammer [34]

Answer:

$49,000

Explanation:

Missing<em>"Cash Event => Cash Paid for Salaries Second Number => _____ __?___, ______ ______ ______"</em>

<em />

Cash paid for salaries (using direct method)

Particulars                                                           Amount

Opening salaries payable                                  $5,000

Add: Salaries expense for the current year      $57,000

Less: Closing salaries payable                           <u>$13,000</u>

Cash paid for salaries during current year     <u>$49,000</u>

4 0
3 years ago
The production of small consumer goods is referred to as?
AURORKA [14]
The correct answer is  :  light Industry

Since a light industry only produce small consumer goods such as clothes, shoes, hand made dolls, etc, it usually less capital oriented than the heavy industries and more consumer oriented than business oriented
8 0
3 years ago
You do an internet search and the results list includes the Web site www.FDIC.gov. This information is?
MAVERICK [17]
The answer is b
Hope I got it right
7 0
3 years ago
Read 2 more answers
Japanese auto manufacturers, such as Toyota and Nissan, have invested billions of dollars in the United States by building new f
kotykmax [81]

The given statement " Japanese auto manufacturers, such as Toyota and Nissan, have invested billions of dollars in the United States by building new factories, warehouses, and offices. These investments increase favorably the balance of payments for the United States " is TRUE.

Explanation:

Last year, Japanese importers and vehicular produced at Japanese production sites in the USA have allowed Japanese firms to establish state-of - the-art factories in the US. Like , a mid-sized bus, with Toyota and Acura, Honda and Lexus, and Nissan with Infinity.

In this region, automotive industry involves many others, not just GM workers, who spend trillions of dollars throughout the economy of this nation. The latest US factories represent over $10 billion in spending in Renault, Toyota and Subaru, with facilities based in the United States.

6 0
3 years ago
Other questions:
  • According to the text, the most logical budget-setting method in advertising is the ________ method. objective-and-task affordab
    10·1 answer
  • If your paycheck indicates that you worked 7.5 hours each day in an 8-day pay period, how many hours did you work in all? A. 54
    13·1 answer
  • Registration in Ms. McNick's classes reaches maximum enrollment quickly. Students register immediately online just to insure the
    13·1 answer
  • According to max weber, ideal bureaucracies are characterized by a chain of command in which authority flows from top to bottom.
    15·1 answer
  • Which of the following combinations of actions by Congress and the Federal Reserve would be most effective in stimulating an eco
    13·1 answer
  • According to the Taylor rule, what is the federal funds target rate under the following conditions?
    8·1 answer
  • Multico is a securities dealer whose principal market is with other securities dealers. To take advantage of a perceived opportu
    12·1 answer
  • Pina Colada Corp. gathered the following reconciling information in preparing its August bank reconciliation: Cash balance per b
    5·1 answer
  • The state of Florida is known to produce oranges more than majority of the other states, so Florida has a(n) __________ in orang
    7·1 answer
  • Preparing job order costing journal entries
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!