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Sheffield Inc. was authorized to issue 100000 £10 par value ordinary shares. As of December 31,...

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Accounting

Sheffield Inc. was authorized to issue 100000 £10 par valueordinary shares. As of December 31, 2020, the company had issued54000 shares at an average price of £22 per share. During 2020, thecompany felt that the shares were undervalued so it purchased 9800treasury shares at £16 per share. When the share price reboundedlater in the year, the company sold 4200 of the treasury shares for£24 per share. Retained earnings was £1666000 at December 31,2020.

Total equity at December 31, 2020 is

£2697200.

£2994000.

£2764400.

£2798000.

Answer & Explanation Solved by verified expert
4.2 Ratings (881 Votes)

--Correct Answer = Option #4: £ 2,798,000

Common Stock Paid in Capital Retained Earnings Treasury Stock Total Stockholder's Equity
Bal 31 Dec 2020 £         1,188,000.00 £                  1,666,000.00 £2,854,000.00
Treasury Stock purchased -£                   156,800.00 -£   156,800.00
Sale of T Stock £                            33,600.00 £                      67,200.00 £   100,800.00
Total Equity at 31 Dec 2020 £         1,188,000.00 £                            33,600.00 £                  1,666,000.00 -£                      89,600.00 £2,798,000.00 ANSWER

--
Working

Common Stock Paid in Capital Retained Earnings Treasury Stock
Bal 31 Dec 2020 =54000*22 1666000
Treasury Stock purchased =-9800*16
Sale of T Stock =4200*8 =4200*16

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