Burlington Corp. has a single class of shares. At its year end December 31, 2020, the company had 5,000,000 ordinary shares issued and outstanding. On the stock exchange, these shares were trading at around $7. In the company's accounts, these shares had a value of $50,000,000. The equity accounts also show $650,000 of contributed surplus from previous repurchases of shares as well as $30.000,000 of Retained Earnings. On January 15, 2021, Burlington repurchased and cancelled 250,000 shares at a cost of $7 per share. On August 20, 2021 the company repurchased and cancelled a further 475,000 shares at a cost of $14 per share. Required: Record the journal entries for the two share transactions in 2021.
Burlington Corp. has a single class of shares. At its year end December 31, 2020, the company had 5,000,000 ordinary shares issued and outstanding. On the stock exchange, these shares were trading at around $7. In the company's accounts, these shares had a value of $50,000,000. The equity accounts also show $650,000 of contributed surplus from previous repurchases of shares as well as $30.000,000 of Retained Earnings. On January 15, 2021, Burlington repurchased and cancelled 250,000 shares at a cost of $7 per share. On August 20, 2021 the company repurchased and cancelled a further 475,000 shares at a cost of $14 per share. Required: Record the journal entries for the two share transactions in 2021.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 24E
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Problem 1
Burlington Corp. has a single class of shares. At its year end December 31, 2020, the company had 5,000,000 ordinary
shares issued and outstanding.
On the stock exchange, these shares were trading at around $7.
In the company's accounts, these shares had a value of $50,000,000.
The equity accounts also show $650,000 of contributed surplus from previous repurchases of shares as well as
$30.000,000 of Retained Earnings .
On January 15, 2021, Burlington repurchased and cancelled 250,000 shares at a cost of $7 per share.
On August 20, 2021 the company repurchased and cancelled a further 475,000 shares at a cost of $14 per share.
Required:
Record the journal entries for the two share transactions in 2021.
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