Worldwide Company obtained a charter from the state in January that authorized 200,000 shares ofcommon stock, $10 par value. During the first year, the company earned $38,200 and the followingselected transactions occurred in the order given:a. Issued 60,000 shares of the common stock at $12 cash per share.b. Reacquired 2,000 shares at $15 cash per share from stockholders; the shares are now held intreasury.c. Reissued 1,000 of the shares in transaction ( b) two months later at $18 cash per share.Required:1. Indicate the effects of each transaction on the accounting equation.2. Prepare journal entries to record each transaction.3. Prepare the stockholders’ equity section of the balance sheet at December 31.TIP: Because this is the first year of operations, Retained Earnings has a zero balance at thebeginning of the year.
Worldwide Company obtained a charter from the state in January that authorized 200,000 shares of
common stock, $10 par value. During the first year, the company earned $38,200 and the following
selected transactions occurred in the order given:
a. Issued 60,000 shares of the common stock at $12 cash per share.
b. Reacquired 2,000 shares at $15 cash per share from stockholders; the shares are now held in
treasury.
c. Reissued 1,000 of the shares in transaction ( b) two months later at $18 cash per share.
Required:
1. Indicate the effects of each transaction on the
2. Prepare
3. Prepare the
TIP: Because this is the first year of operations,
beginning of the year.
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