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  3. 2. carl corporation designs and produces a line of

2. Carl Corporation designs and produces a line of golf equipment and golf apparel. Carl has...

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Accounting

2. Carl Corporation designs and produces a line of golfequipment and golf apparel. Carl has 150,000 shares of common stockoutstanding as of the beginning of the year. Carl has the followingtransactions affecting stockholders’ equity during the year.

March 1 Issues 60,000 additional shares of $1 par value commonstock for $50 per share. May 10 Repurchases 10,000 shares oftreasury stock for $58 per share. June 1 Declares a cash dividendof $1.00 per share to all stockholders of record on June 15. July 1Pays the cash dividend declared on June 1. October 21 Reissues5,000 shares of treasury stock purchased on May 10 for $62 pershare.

Required: Record each of these transactions (10 points).

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Solution :

Journal Entries - Carl Corporation
Date Particulars Debit Credit
1-Mar Cash Dr $3,000,000.00
      To Common Stock $60,000.00
      To Paid in capital in excess of par - common stock $2,940,000.00
(To record issue of shares)
10-May Treasury stock Dr $580,000.00
      To Cash $580,000.00
(To record purchase of own shares)
1-Jun Dividends Dr [(150000+60000-10000)*$1] $200,000.00
      To Dividend payable $200,000.00
(To record cash dividend declared)
1-Jul Dividend payable Dr $200,000.00
      To Cash $200,000.00
(To record payment of dividend)
21-Oct Cash Dr (5000*$62) $310,000.00
      To Treasury Stock $290,000.00
      To Additional paid in capital $20,000.00
(To record reissue of treasury shares)

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