Chapter 6
Corporations: Contributed Capital and Dividends
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b) Record the share reacquisition journal entry on October 1, 2016.
Date
Account Title and Explanation
Debit
Credit
c) After the share issuance on December 1, 2016, how many outstanding common shares
would Choibok Corp. have? What will Choibok Corp.’s common share balance and average
cost of shares be after the share issuance?
AP-21B
(
11
)
The beginning balances of Prakun Corporation’s shareholders’ equity accounts for the fiscal
year ending December 31, 2016 are as follows.
Common shares (1,000,000 shares authorized, 70,000 shares issued)
$140,000
Contributed surplus
10,000
Retained earnings
180,000
The following are the only transactions related to shareholders’ equity that happened
between December 31, 2015 and December 31, 2016.
On February 15, 2016, Prakun received $110,000 from issuing 30,000 common shares.
On November 30, 2016, Prakun paid $40,000 to repurchase 10,000 common shares.
