Chapter 13 Corporations: Organization, Stock Transactions, and Dividen To illustrate, assume that a corporation has the following paid-in capital on January 1: Common stock, $25 par (20,000 shares authorized and issued) $500,000 Excess of issue price over par 150,000 $650,000 On February 13, the corporation purchases 1,000 shares of its common stock at VE per share. The entry to record the purchase of the treasury stock is as follows: 13 Treasury Stock Feb. 45,000 Cash 45,000 Purchased 1,000 shares of treasury stock at $45. On April 29, the corporation sells 600 shares of the treasury stock for $60. The entry to record the sale is as follows: Apr. 29 Cash 36,000 Treasury Stock Paid-In Capital from Sale of Treasury Stock Sold 600 shares of treasury stock at $60. 27,000 9,000 A sale of treasury stock may result in a decrease in paid-in capital. To the extent that Paid-In Capital from Sale of Treasury Stock has a credit balance, it is debited for any such decrease. Any remaining decrease is then debited to the retained earnings account. To illustrate, assume that on October 4, the corporation sells the remaining 400 shares of treasury stock for $40 per share. The entry to record the sale is as follows: 16,000 Oct. 4 Cash 2,000 Paid-In Capital from Sale of Treasury Stock Treasury Stock Sold 400 shares of treasury stock at $40. 18,000 preceding October 4 entry decreases paid-in capital by $2,000. Because Paid-In Capital from Sale of Treasury Stock has a credit balance of $9,000, the entire $2,000 as debited to Paid-In Capital from Sale of Treasury Stock. No dividends (cash or stock) are paid on the shares of treasury stock. To do so would result in the corporation earning dividend revenue from itself. Example Exercise 13-5 Entries for Treasury Stock

Scenario: It's 12/31 and I'm doing financial statement accounting adjustments. On October 1st, my company borrowed $25,000 from the a bank involving a 1-year, 12% note payable. Principal ands interest are due after 1 year.   On the Balance Sheet, I thought the Liabilities and Stocholders Equity would be $7k and -$7k, respectively, but that's not correct. I figured for the Income Statement, the Expenses and Net Income would be $7k and -$7k, respectively. That also isn't correct. The categories are correct, but my $ figures aren't. Could someone please help.

Can you help me? Prepare an income statement for the year ended December 31, 20Y5. Answer Check Figure: Net income, $137,400 Prepare a statement of stockholders’ equity for the year ended December 31, 20Y5. During the year, common stock of $25,000 was issued. Prepare a balance sheet as of December 31, 20Y5. Based upon the end-of-period spreadsheet, journalize the closing entries. Prepare a post-closing trial balance

. 7 Mutual funds and individual stocks sometimes have graphs like the one shown below. AMZN (NASDAQ) February 12, 2012-February 12, 2013 299.81 272.39 24497 21755 10271 $191.59 +2012 OF 2012 Source: Microsoft Finance February 12, 2013. Markel data by Morningstar. $284.72 $257.21 a. How would you describe the pattern of change in the price of one share of Amazon.com stock over the one-year period shown? b. Estimate the equivalent simple annual interest rate earned on a share of Amazon stock purchased on February 12, 2012. c. Suppose you had purchased 100 shares of Amazon stock on February 12, 2012 and sold it at the highest value of the stock during the year that followed. What equivalent simple annual interest rate would you have earned? What would be the profit on your investment? €

The right side of the balance sheet shows the firm’s liabilities and stockholders’ equity. Which of the following best describes shareholders’ equity? Equity is the sum of what the initial stockholders paid when they bought company shares and the earnings that the company has retained over the years.   Equity is the difference between the paid-in capital and retained earnings.     NOW Inc. released its annual results and financial statements. Grace is reading the summary in the business pages of today’s paper. In its annual report this year, NOW Inc. reported a net income of $136 million. Last year, the company reported a retained earnings balance of $459 million, whereas this year it increased to $540 million. How much was paid out in dividends this year? $4 million   $217 million   $55 million   $280 million

A company's financial statements include the following selected data ($ in millions): Sales, $22,600; Net income, $900; Beginning stockholders' equity, $3,540; Ending stockholders' equity, $4,200.Calculate the return on equity. (Round your answer to 1 decimal place.)   Return on equity: _________%

1 Assume an investor deposits $115,332 in a professionally managed account. One year later, the account has grown in value to $147,367 and the investor withdraws $44,209. At the end of the second year, the account value is $91,455. No other additions or withdrawals were made. Calculate holding period return during year 2. Round the answer to two decimals in percentage form. Please write % sign in the units box. Your Answer: 2 Assume an investor deposits $118,152 in a professionally managed account. One year later, the account has grown in value to $149,976 and the investor withdraws $42,343. At the end of the second year, the account value is $91,322. No other additions or withdrawals were made. Calculate holding period return during year 2. Round the answer to two decimals in percentage form. Please write % sign in the units box. Answer: