Problem 18–3
Requirement 1
February 15, 2018
(a) Retired
Common stock (300,000 shares x $1 par)…………………….. 300,000
(b) Accounted for as treasury stock
February 17, 2019
(a) Retired
Common stock (300,000 shares x $1 par)…………………….. 300,000
Paid-in capital—excess of par
(b) Accounted for as treasury stock
Problem 18–3 (concluded)
November 9, 2020
(a) Retired
Cash (200,000 shares x $7)……………………………………….. 1,400,000
(b) Accounted for as treasury stock
Cash (200,000 shares x $7)……………………………………….. 1,400,000
Requirement 2
Shareholders’ Equity
SHARES RETIRED TREASURY
STOCK
Paid-in capital:
Common stock, $1 par, ………………………………….. $ 5,600,000
$ 6,000,000
$164,850,000
or, alternatively:
Paid-in capital:
Common stock, $1 par, ………………………………….. $ 5,600,000
$ 6,000,000
$164,850,000
Problem 18–4
2016
Retained earnings………………………………………………… 160,500
Income summary……………………………………………… 160,500
2017
* Paid-in capital—excess of par: $7,420 ÷ 1,855 = $4
Retained earnings (given)………………………………………. 698,000
2018
Income summary…………………………………………………. 3,308,700
Retained earnings ……………………………………………. 3,308,700
Problem 18–5
Requirement 1
2018
a. November 1—declaration date
Retained earnings………………………………………………… 84,000,000
November 15—date of record
no entry
December 1—payment date
2019
b. March 1—declaration date
Investment in Warner bonds………………………………….. 300,000
Gain on appreciation of investment
March 13– date of record
no entry
April 5– payment date
c. July 12
Retained earnings (5,250,000* x $21 per share)………….. 110,250,000
Problem 18–5 (continued)
d. November 1—declaration date
Retained earnings………………………………………………… 88,000,000
November 15—date of record
no entry
December 1—payment date
2020
e. January 15
**alternatively, retained earnings may be debited
f. November 1—declaration date
November 15—date of record
no entry
December 1—payment date
Problem 18–5 (concluded)
Requirement 2
BRANCH-RICKIE CORPORATION
Statement of Shareholders’ Equity
For the Years Ended Dec. 31, 2018, 2019, and 2020 ($ in 000s)
Common
Stock
Additional
Paid-in Capital
Retained
Earnings
Total
Shareholders’
Equity
Jan. 1, 2018 105,000 630,000 970,000 1,705,000
3-for-2 split
effected in the
form of a stock