Final answer:
To record the transactions of Cal Cookie Company (CCC), you will need to update the outstanding shares after each repurchase and retirement. For the January 4, 2016 transaction, 1 million shares were repurchased and retired at $8 per share. For the June 25, 2016 transaction, 2 million shares were repurchased and retired at $2 per share. After these transactions, the updated shareholder's equity will be: Common stock: 77 million shares at $1 par, Paid-in-Capital - excess of par: $148,000,000, and Retained Earnings: $120,000,000.
Step-by-step explanation:
To record the transactions of Cal Cookie Company (CCC), we need to update the outstanding shares after each repurchase and retirement.
January 4, 2016
Repurchased and retired 1 million shares at $8 per share:
- Decrease in outstanding shares: 1 million
- Decrease in common stock: $1 million (1 million shares x $1 par value)
- Decrease in paid-in-capital excess of par: $8 million (1 million shares x $8 repurchase price)
June 25, 2016
Repurchased and retired 2 million shares at $2 per share:
- Decrease in outstanding shares: 2 million
- Decrease in common stock: $2 million (2 million shares x $1 par value)
- Decrease in paid-in-capital excess of par: $4 million (2 million shares x $2 repurchase price)
After these transactions, the updated shareholder's equity will be:
- Common stock: 77 million shares at $1 par ($77,000,000)
- Paid-in-Capital - excess of par: $148,000,000
- Retained Earnings: $120,000,000