Tutorial - Corporation Stock - Students

TOPIC : CORPORATION – STOCK AND TREASURY STOCK
1. On January 1, 2020, Vidalia Company issued 30,000 shares of $2 par value common
stock for $150,000. On March 1, 2020, the company purchased 6,000 shares of its
common stock for $8 per share for the treasury. On June 1, 2020, 1,500 of the treasury
shares are sold for $10 per share. On September 1, 2020, 3,000 treasury shares are
sold at $6 per share.
Required :
Journalize the stock transactions of Vidalia Company in 2020.
2. Roca Company originally issued 30,000 shares of $5 par common stock for $240,000
on January 3, 2020. Roca purchased 1,500 shares of treasury stock for $15,000 on
November 2, 2020. On December 6, 2020, 600 shares of the treasury stock are sold
for $7,200.
Required :
Prepare journal entries to record these stock transactions.
3. In its first year of operations, Banner Elk Corporation had the following transactions
pertaining to its $10 par value preferred stock.
Feb. 1 Issued 6,000 shares for cash at $43 per share.
Nov. 1 Issued 3,000 shares for cash at $45 per share.
Required:
a. Journalize the transactions.

b. Indicate the amount to be reported for (1) preferred stock, and (2) paid-in capital
in excess of par — preferred stock at the end of the year.
4. On July 6, Crevasse Corporation issued 2,000 shares of its $1.50 par common stock.
The market price of the stock on that date was $18 per share. Journalize the issuance
of the stock.
5. Dominica Corporation is authorized to issue 1,000,000 shares of $1 par value

common stock. During 2020, the company has the following stock transactions.
Jan. 15 Issued 400,000 shares of stock at $7 per share.
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Sept. 5 Purchased 30,000 shares of treasury stock at $9 per share.
Required:
Journalize the transactions for Dominica Corporation.
6. On February 1, Westwood Corporation issued 5,000 shares of its $20 par value
preferred stock for $26 per share. Journalize the transaction.
7. Orley Company had the following transactions.

Issued 5,000 shares of common stock with a stated value of $10 for $130,000.
Issued 2,000 shares of $100 par preferred stock at $108 for cash.
Prepare the journal entries to record the above stock transactions.
8. The following items were shown on the balance sheet of Westwind Corporation on
December 31, 2020:
Stockholders’ equity
Paid-in capital
Capital stock
Common stock, $5 par value, 400,000 shares
authorized; ______ shares issued and ______ outstanding ......... $1,850,000
Additional paid-in capital
In excess of par ............................................................................. 165,000
Total paid-in capital .................................................................. 2,015,000
Retained earnings .................................................................................... 750,000

Total paid-in capital and retained earnings.................................... 2,765,000
Less: Treasury stock (18,000 shares) .................................................. 180,000
Total stockholders' equity .............................................................. $2,585,000
Required:
Complete the following statements and show your computations.

a. The number of shares of common stock issued was _______________.
b. The number of shares of common stock outstanding was ____________.
c. The sales price of the common stock when issued was $____________.
d. The cost per share of the treasury stock was $_______________.
e. The average issue price of the common stock was $______________.
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f. (f) Assuming that 25% of the treasury stock is sold at $20 per share, the balance
in the Treasury Stock account would be $_______________.
9. Yohnalasse Corporation has the following stockholders' equity accounts on January

1, 2020:
Common Stock, $10 par value ................................... $1,500,000
Paid-in Capital in Excess of Par .................................. 200,000
Retained Earnings ....................................................... 500,000
Total Stockholders' Equity ...................................... $2,200,000
The company uses the cost method to account for treasury stock transactions. During
2020, the following treasury stock transactions occurred:
April 1 Purchased 10,000 shares at $18 per share.
August 1 Sold 4,000 shares at $22 per share.
October 1 Sold 4,000 shares at $15 per share.
Instructions
(a) Journalize the treasury stock transactions for 2020.
(b) Prepare the Stockholders' Equity section of the balance sheet for Yohnalasse
Corporation at December 31, 2020. Assume net income was $110,000 for 2020.
10. Answer the following questions

a. Name at least three factors that influence the market value of stock.
b. Corporations acquire treasury stock for a variety of purposes. Name three reasons
why treasury stock may be acquired by a corporation.
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TOPIC : CORPORATION – STOCK AND TREASURY STOCK

a. Journalize the transactions.

5. Dominica Corporation is authorized to issue 1,000,000 shares of $1 par value

7. Orley Company had the following transactions.

Prepare the journal entries to record the above stock transactions.

Retained earnings .................................................................................... 750,000

Complete the following statements and show your computations.

9. Yohnalasse Corporation has the following stockholders' equity accounts on January

10. Answer the following questions

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