Question

The Kramer Company was started when it issued 200 shares of $5 par value common stock at a market price of $20 per share. The company repurchased 10 shares at a market price of $15 per share. Later the company reissued 5 shares at a market price of $20 per share. At the end of the first year of operation the companys equity included $1,200 of retained earnings in addition to its contributed capitol. The total amount of stockholder's equity a the end of the first year would be

Answer 1

Total Equity: 5,200

Step-by-step explanation:

200 share at $5 par value

common stock $20

treasury stock

10 shares at $15

reissued 5 at $20

Common stock 1,000 (200 shares at 5)

Paid in excess of par 3,075 (A)

retained earnings 1,200

Treasury Stock ($25) (5 shares at 5)

Paid- excess of par TS ($50) (5 shares at 15-5 = 5 x 10 = 50)

Total Equity: 5,200

(A)

when issue the shares:

cash 4000

cs 1000

paid in excess of par 3000

when reissued TS

cash 100

treasury stock 25

paid in excess of par TS 50

paid in excess of par CS 25