Court Casuals had several transactions affecting stockholders' equity during the year, including issuing additional shares, repurchasing treasury stock, declaring and paying dividends, and reissuing treasury stock.
The transactions involving Court Casuals' stockholders' equity during the year are as follows:
- May 18: The company issues 25,000 additional shares of $1 par value common stock for $35 per share. This increases the number of shares outstanding to 125,000.
- May 31: The company repurchases 6,000 shares of treasury stock for $44 per share. The treasury stock is recorded as a reduction in stockholders' equity.
- July 1: The company declares a cash dividend of $1 per share to all stockholders of record on July 15. This declaration reduces retained earnings and increases the liability for dividends payable.
- July 31: The company pays the cash dividend declared on July 1. This reduces the liability for dividends payable and the company's cash balance.
- August 10: The company reissues 2,900 shares of treasury stock purchased on May 31 for $49 per share. The reissued treasury stock increases the number of shares outstanding.
The complete question is here:
Court Casuals has 100,000 shares of common stock outstanding as of the beginning of the year and has the following transactions affecting stockholders' equity during the year.
May 18 Issues 25,000 additional shares of $1 par value common stock for $35 per share.
May 31 Repurchases 6,000 shares of treasury stock for $44 per share.
July 1 Declares a cash dividend of $1 per share to all stockholders of record on July 15.
Hint: Dividends are not paid on treasury stock.
July 31 Pays the cash dividend declared on July 1.
August 10 Reissues 2,900 shares of treasury stock purchased on May 31 for $49 per share.
Record each of these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)