National Supply's shareholders' equity included the following accounts at December 31, 2015:
| Shareholders' Equity |
($millions) |
| Common stock, 2 million shares at $1 par |
$ |
2,000,000 |
|
| Paid-in capital-excess of par |
|
16,000,000 |
|
| Retained earnings |
|
82,000,000 |
Required:
1. National Supply reacquired shares of its common stock in two separate transactions and later sold shares. Prepare the entries for each of the transactions under each of two separate assumptions: the shares are (a) retired and (b) accounted for as treasury stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)
| February 15, 2016 |
Reacquired 260,000 shares at $11 per share. |
| February 17, 2017 |
Reacquired 260,000 shares at $8.50 per share. |
| November 9, 2018 |
Sold 170,000 shares at $10 per share (assume FIFO cost). |
2. Prepare the shareholders' equity section of National Supply's balance sheet at December 31, 2018, assuming the shares are (a) retired and (b) accounted for as treasury stock. Net income was $18 million in 2016, $19 million in 2017, and $20 million in 2018. No dividends were paid during the three-year period. (Enter your answers in whole dollars.)