ACC - DeeWhy Corporation
Question # 00035286
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Updated on: 12/08/2014 09:16 AM Due on: 12/08/2014
Assignment 3
The stockholders' equity section of DeeWhy Corporation's balance sheet at December 31,
2013, appears below:
Stockholders' equity
Share Capital - Ordinary
($10 par value, 400,000 shares authorized;
250,000 issued and outstanding) $2,500,000
Share Premium - Ordinary 1,200,000
3,700,000
Retained earnings 600,000
Total stockholders' equity $4,300,000
During 2014, the following stock transactions occurred:
Jan. 18 Issued 50,000 shares of Share Capital - Ordinary at $30 per share.
Aug. 20 Purchased back 25,000 shares of DeeWhy Corporation's Share Capital - Ordinary
at $24 per share to be held in the treasury.
Nov. 5 Reissued 9,000 shares of treasury stock for $28 per share.
Dec 6 Declared a 2% share dividend on its 400,000 shares of €10 par value ordinary
shares. The current fair market value of its shares is €15 per share.
Instructions
(a) Prepare the journal entries to record the above stock transactions.
(b) Prepare the stockholders' equity section of the balance sheet for DeeWhy Corporation at December 31, 2014. Assume that net income for the year was $100,000.
The stockholders' equity section of DeeWhy Corporation's balance sheet at December 31,
2013, appears below:
Stockholders' equity
Share Capital - Ordinary
($10 par value, 400,000 shares authorized;
250,000 issued and outstanding) $2,500,000
Share Premium - Ordinary 1,200,000
3,700,000
Retained earnings 600,000
Total stockholders' equity $4,300,000
During 2014, the following stock transactions occurred:
Jan. 18 Issued 50,000 shares of Share Capital - Ordinary at $30 per share.
Aug. 20 Purchased back 25,000 shares of DeeWhy Corporation's Share Capital - Ordinary
at $24 per share to be held in the treasury.
Nov. 5 Reissued 9,000 shares of treasury stock for $28 per share.
Dec 6 Declared a 2% share dividend on its 400,000 shares of €10 par value ordinary
shares. The current fair market value of its shares is €15 per share.
Instructions
(a) Prepare the journal entries to record the above stock transactions.
(b) Prepare the stockholders' equity section of the balance sheet for DeeWhy Corporation at December 31, 2014. Assume that net income for the year was $100,000.
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Solution: ACC - DeeWhy Corporation Solution