Question

Southern Amusements Corporation had the following stockholders' equity on November 30: BEE lick the icon to view the stockholders' equity.) On December 30, Southern purchased 125 shares of treasury stock at $13 per share.

Requirements
1. Journalize the purchase of the treasury stock.
2. Prepare the stockholders' equity section of the balance sheet at December 31, 2016. Assume the balance in retained earnings is unchanged from November 30
3. How many shares of common stock are outstanding after the purchase of treasury stock?

Answer 1

the first part is missing, so I looked it up:

1) December 30, 202x, treasury stocks are purchased

Dr Treasury stocks 1,625

Cr Cash 1,625

2) Stockholders' Equity

Paid-in capital:

• Common stocks, 1,300 shares $1,550
• authorized, 310 shares issued
• Paid-in capital in excess of par value $4,650
• Total paid-in capital: $6,200

Retained earnings $53,000

Treasury stocks (125 stocks at cost) ($1,625)

Total Stockholders' Equity $51,375

3) outstanding shares = 310 - 125 = 185 outstanding stocks