As of January 1, 2023, the equity section of TS Sport Co.'s balance sheet contained the following: (Click the icon to view the equity section.) On May 1, the company spent $1,340,000 to repurchase 450,000 common shares. These shares were cancelled immediately. On July 15, the company repurchased and cancelled 4,000 preferred shares at $22/share. .On November 1, the company declared and paid the annual cash dividends on the preferred shares. On the same day, the company issued a 10% stock dividend on common shares. TS Sport's stock traded at $8/share after the dividend. Requirement Assume that TS Sport follows the guidance ASPE pertaining to accounting for equity transactions. Record the journal entries for the above transactions occurring in 2023.
As of January 1, 2023, the equity section of TS Sport Co.'s balance sheet contained the following: (Click the icon to view the equity section.) On May 1, the company spent $1,340,000 to repurchase 450,000 common shares. These shares were cancelled immediately. On July 15, the company repurchased and cancelled 4,000 preferred shares at $22/share. .On November 1, the company declared and paid the annual cash dividends on the preferred shares. On the same day, the company issued a 10% stock dividend on common shares. TS Sport's stock traded at $8/share after the dividend. Requirement Assume that TS Sport follows the guidance ASPE pertaining to accounting for equity transactions. Record the journal entries for the above transactions occurring in 2023.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:As of January 1, 2023, the equity section of TS Sport Co.'s balance sheet contained the following:
(Click the icon to view the equity section.)
On May 1, the company spent $1,340,000 to repurchase 450,000 common shares. These shares were cancelled immediately.
.On July 15, the company repurchased and cancelled 4,000 preferred shares at $22/share.
.On November 1, the company declared and paid the annual cash dividends on the preferred shares. On the same day, the company issued a 10% stock dividend on common shares. TS Sport's stock traded at $8/share after the dividend.
Requirement
Assume that TS Sport follows the guidance in ASPE pertaining to accounting for equity transactions. Record the journal entries for the above transactions occurring in 2023.
May 1, 2023: The company spent $1,340,000 to repurchase 450,000 common shares. These shares were cancelled immediately. (Record debits first, then credits. Explanations are not required. Prepare the journal entries under the guidance of ASPE.)
Date
Accounts
Debit Credit
May 1, 2023
On July 15, 2023, the company repurchased and cancelled 4,000 preferred shares at $22/share.
Date
Accounts
July 15, 2023
Debit
Date
November 1,
2023
Credit
November 1, 2023: The company declared and paid the annual cash dividends on the preferred shares. On the same day, the company issued a 10% stock dividend on common shares. TS Sport's stock traded at $8/share after the dividend.
Begin by recording the declaration and payment of the annual cash dividends on the preferred shares.
Accounts
Debit
Credit
Now, record the issuance of a 10% stock dividend on common shares. TS Sport's stock traded at $8/share after the dividend.
Date
Accounts
Credit
Debit
November 1,
2023
Data table
Common shares, 15,000,000 authorized, 3,000,000
issued and outstanding
Contributed surplus-from repurchase and cancellation
of common shares
Contributed surplus-expired options on common
shares
Preferred shares, $6 cumulative dividend, 1,000,000
authorized, 30,000 issued and outstanding
Retained earnings
Total shareholders' equity
Print
Done
$ 6,000,000
225,000
700,000
750,000
2,500,000
$10,175,000
X
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