Problem - ABC Inc. has the following stockholders' equity on January 1, 2013:
Common stock, 500,000 shares, $5 par $2,500,000
Contributed capital in excess of par-common $7,500,000
Treasury Stock, 50,000 shares $1,100,000
Retained earnings $6,000,000
Paid in capital - Share repurchase $50,000
Throughout the year, ABC Inc. has made the following transactions:
January 7th ABC Inc. acquires 20,000 shares when the market price was $24 per share.
February 5th Retires 30,000 shares when the market price was $21 per share.
March 19th Reissues 50,000 shares of treasury stock at $25 per share. ABC Inc. uses the FIFO method.
April 28th ABC Inc. decides to retire their remaining treasury stock when the market is $23 per share.
May 14th Issues an additional 25,000 shares in exchange for a piece of equipment that has a fair market value of $550,000.
July 20th ABC Inc. declares that there will be a two-for-one stock split
August 3rd ABC Inc. declares a 10% stock dividend when the current market price is $25.
There are fractional shares equivalent to 5,000 shares that will be paid in cash.
October 12th A $1 cash dividend is declared. The date of record is October 20th, and the date of payment will be October 31st.
December 8th A 40% stock dividend is issued.
Required:
1) Prepare the appropriate journal entries for each transaction.
2) How many shares are issued and outstanding at the end of 2013?