Stock Dividend, Cash Dividend, and Treasury Stock
(Stock Dividend, Cash Dividend, and Treasury Stock) Mask Company has
30,000 shares of $10 par value common stock authorized and 20,000 shares
issued and outstanding. On August 15, 2017, Mask purchased 1,000 shares
of treasury stock for $18 per share. Mask uses the cost method to account
for treasury stock. On September 14, 2017, Mask sold 500 shares of the
treasury stock for $20 per share.
In October 2017, Mask declared and distributed 1,950 shares as a stock
dividend from unissued shares when the market price of the common stock
was $21 per share.
On December 20, 2017, Mask declared a $1 per share cash dividend,
payable on January 10, 2018, to shareholders of record on December 31,
2017.
Instructions
(a)How should Mask account for the purchase and sale of the treasury
stock, and how should the treasury stock be presented in the balance
sheet at December 31, 2017?
(b)How should Mask account for the stock dividend, and how would it
affect the stockholders' equity at December 31, 2017? Why?
(c)How should Mask account for the cash dividend, and how would it
affect the balance sheet at December 31, 2017? Why?
A Purchase of Treasury Stock
Descriptio
n
Debit
Credit Sale of Treasury Stock
Descriptio
n B Descriptio
n C Debit Credit Stock Dividend
Debit Credit Cash Dividend
Descriptio
n Debit Credit
Attachments:
Answers
Status NEW
Posted 22 May 2017 08:05 AM
My Price 20.00
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Attachments
file 1495443648-Solutions file.docx preview (56 words )
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