Learning Materials
Features
Discover
Chapter 13: 1RQ (page 707)
What is a corporation?
A corporation is an organization that includes generally a group of people or a company that is authorized by the state to act as a single entity and recognized as such in law for specific purposes.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Question: Accounting for the purchase and sale of treasury stock
Discount Furniture, Inc. completed the following treasury stock transactions in 2018:
Dec. 1 Purchased 1,900 shares of the company’s \(1 par value common stock as treasury stock, paying cash of \)5 per share.
15 Sold 200 shares of the treasury stock for cash of \(8 per share.
20 Sold 1,000 shares of the treasury stock for cash of \)1 per share. (Assume the balance in Paid-In Capital from Treasury Stock Transactions on December 20 is $2,400.)
Requirements
2. How will Discount Furniture, Inc. report treasury stock on its balance sheet as of December 31, 2018?
Identifying advantages and disadvantages of a corporation
Following is a list of advantages and disadvantages of the corporate form of business. Identify each quality as either an advantage or a disadvantage.
e. Exposure to double taxation is evident.
Journalizing treasury stock transactions and reporting stockholders’ equity
Southern Amusements Corporation had the following stockholders’ equity on
November 30:
Paid-In Capital:
Common Stock—\(5 Par Value; 1,300 sharesauthorized, 250 shares issued and outstanding1,250
Retained Earnings50,000
Total Stockholders’ Equity \) 55,000
Stockholders’ Equity
Paid-In Capital in Excess of Par—Common 3,750
Total Paid-In Capital
\(5,000
On December 30, Southern purchased 200 shares of treasury stock at \)15 per share.
Requirements
1. Journalize the purchase of the treasury stock.
Question: Journalizing issuance of stock—at par and at a premium
Colorado Corporation has two classes of stock: common, \(3 par value; and preferred, \)30 par value.
Requirements
2. Journalize Colorado’s issuance of 4,500 shares of preferred stock for a total of $135,000
Computing rate of return on common stockholders’ equity Wyler, Inc.’s 2018 balance sheet reported the following items—with 2017 figures given for comparison:
Total Assets Total Liabilities and Stockholders’ Equity Total Liabilities Total Stockholders’ Equity (all common) WYLER, INC. Balance Sheet As of December 31, 2018, and December 31, 2017 \( 39,600 December 31, 2018 17,100 22,500 18,500 14,962 December 31, 2017 \) 39,600 \( 33,462 \) 33,462 Net income for 2018 was $3,690.
Compute Wyler’s rate of return on common stockholders’ equity for 2018.
What do you think about this solution?
We value your feedback to improve our textbook solutions.
Explanations 
Textbooks 
Exams 
GCSE 
IGCSE 
AS 
A Level 
International A Level 
University Admissions Tests 
Flashcards 
Vaia AI 
Notes 
Study Plans 
Study Sets 
Find a job 
Find a degree 
Student Deals 
Magazine 
Mobile App