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
Airida [17]
2 years ago
5

At its date of incorporation, Sauder, Inc. issued 100,000 shares of its $10 par common stock at $11 per share. During the curren

t year, Sauder acquired 20,000 shares of its common stock at a price of $16 per share and accounted for them by the cost method. Subsequently, these shares were reissued at a price of $12 per share. There have been no other issuances or acquisitions of its own common stock. What effect does the reissuance of the stock have on the following accounts? Explain and show your work.Retained Earnings Additional Paid-in Capitala. Decrease Decreaseb. No effect Decreasec. Decrease No effect
d. No effect No effect
Business
1 answer:
alexandr402 [8]2 years ago
7 0

Answer:

Sauder Inc.

The answer is d.

The effect of the reissuance of the stock on:

1)Retained Earnings - No effect

2) Additional Paid-in Capital: No effect

Using the cost method or the par value method, there is no effect on Retained Earnings by the reissuance of stock.

Using the cost method, there is no effect on the Additional Paid-in Capital.  Every treasury stock transaction is recorded in the Treasury Stock account without reference to the Additional Paid-in Capital.

Using the par value method, there is an effect on the Additional Paid-in Capital for reissuance of stock at more than the par value.

Workings:

The reissuance would be recorded as follows, using the costing method:

Debit Cash with $240,000

Credit Treasury Stock with $240,000

To record the reissuance of 20,000 shares at $12 per share.

The reissuance would be recorded as follows, using the par value method:

Debit Cash with $240,000

Credit Treasury Stock with $200,000

Credit Additional Paid-in Capital with $40,000

To record the reissuance of 20,000 shares at $12 per share.

Explanation:

Treasury Stock account is a contra account to the Common Stock account.  There are two methods for recording treasury stock transactions: the costing method and the par value method.

Under the costing method, every treasury stock transaction is recorded in the Treasury Stock account.  Under the par value method, the above or below par value elements of treasury stock transactions are recorded in the Additional Paid-in Capital account.

You might be interested in
Why does a business cycle diagram serve as a forecasting model​
Tanzania [10]

Answer:

puedes poner la pregunta en españo?

8 0
2 years ago
Individuals who fail to complete high school are at an increased risk for
kari74 [83]
I believe it’s all of the above
5 0
3 years ago
he journal entry to record $5.6 million in sales on account includes a ______. (Select all that apply.) Multiple select question
Anarel [89]

<em>The journal entry to record $5.6 million in sales on account includes a </em><em>credit to Sales Revenue of $5.6 million and debit to Accounts Receivable of $5.6 million.</em>

<h3>What does journal entry mean?</h3>

A journal entry is a record of a business's financial transactions kept in its accounting books. An accurate date, the sums to be debited and credited, a description of the transaction, and a special reference number are all components of a properly documented journal entry. The accounting cycle begins with a journal entry.

<h3>What is an example of a journal entry?</h3>

A purchase of machinery by a nation, where the cash account will be credited and the machinery account debited, is an example of a journal entry.

learn more about journal entry here <u>brainly.com/question/26446159</u>

#SPJ4

8 0
1 year ago
Operational planning should be completed by ________, and tactical planning is done by ________.
Sedaia [141]

Answer:

Operational planning should be completed by

<u>first</u><u> </u><u>line </u><u>managers </u><u>every</u> and tactical planning is done by <u>middle </u><u>management</u><u> </u><u>every.</u>

What is are the duties of first line managers every?

The primary responsibility of first line manager is to manage the performance of entry level employees who are responsible for producing a company's good.

What is the duties of middle management every?

Middle manager are typically responsible for coordinating and linking groups, departments, and division within a company.

6 0
2 years ago
Do these ratio values and ratios look​ strong, weak or in​ between?
kvasek [131]

Answer:

Ratio values cannot be judged in isolation.  For example, the Phone Corporation's ratios calculated previously have no industry benchmarks against which they can be compared.  The ratios for competitor can also be used for comparison.  Again, the ratios were calculated for only one period in each case.  There should be a trend analysis and computation of ratios over some years in order to assess their strengths and weaknesses.

Overall, they do not look strong.  But, one should not be too quick to conclude on this issue.

Explanation:

Ratio analysis is a technical method of gaining insight into a company's liquidity, operational efficiency, and profitability by comparing the elements of its financial statements such as the balance sheet and income statement.  While ratio analysis is a cornerstone of fundamental equity analysis, it must be noted that the values produced are just relative measures which cannot be meaningful without being related to some benchmarks or compared over a number of years.

5 0
3 years ago
Other questions:
  • Out of the following- Savings bank, Commercial bank, and Credit Union which is a nonprofit financial institution?
    12·1 answer
  • A computer maintenance company wants to 'capture' the knowledge that employees carry around in their heads by creating a databas
    14·1 answer
  • Should the retail price of a proposed garment be one of the factors considered by the npd committee at the screening stage?
    6·1 answer
  • If a radio station holds an online contest in which you must log in to its website and submit personal details such as name, pho
    14·1 answer
  • Why are sales so important? please describe in details
    12·1 answer
  • During last year the price of regular unleaded gasoline in Oakland, California increased 10 percent. If the price elasticity of
    6·1 answer
  • During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of mercha
    13·1 answer
  • The TSA suits:
    15·2 answers
  • A high-tech computer company reported the following information in a recent annual report (all dollar amounts are expressed in m
    13·1 answer
  • How can you describe the business in no more than 2 sentences?
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!