Account for issuance of stock, treasury stock, and other changes in stockholders
E10-91 (Learning Objectives 2, 3, 4: Account for issuance of stock, treasury stock, and other changes in stockholders’ equity) Smiley Site, Inc., ended 2012 with 10 million shares of $1 par common stock issued and outstanding. Beginning additional paid-in capital was $9 million, and retained earnings totaled $44 million.
â–¶ In April 2013, Smiley Site issued 9 million shares of common stock at a price of $2 per share.
▶ In June, the company distributed a 10% stock dividend at a time when Smiley Site’s common stock had a market value of $12 per share.
▶ Then in September, Smiley Site’s stock price dropped to $1 per share and the company pur- chased 9 million shares of treasury stock.
â–¶ For the year, Smiley Site earned net income of $24 million and declared cash dividends of
$13 million.
â–¶ Requirement
1.    Complete the following tabulation to show what Smiley Site should report for stockholders’ equity at December 31, 2013. Journal entries are not required.
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Posted 15 May 2017 12:05 PM
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