Global Marine obtained a charter from the state in January t

Global Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $330,000 of net income and the following selected transactions occurred in the order given:

Reissued 6,500 shares from treasury for $42 per share.

Indicate the account, amount, and direction of the effect on above transaction. (Enter any decreases to account balances with a minus sign.)

Prepare journal entries to record each transaction. (If no entry is required for a transaction/event, select \"No Journal Entry Required\" in the first account field.)

Prepare the stockholders’ equity section of the balance sheet at December 31. (Amounts to be deducted should be indicated by a minus sign.)

Global Marine obtained a charter from the state in January that authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $330,000 of net income and the following selected transactions occurred in the order given:

Solution

1 Transaction Assets a Cash + 5760000 b Cash - 774000 c Cash + 286000 d Cash + 273000 2 Transaction General Journal Debit Credit a Cash 120000*48 5760000 Common Stock 120000*5 600000 Additional Paid-in Capital 5160000 b Treasury Stock 774000 Cash 774000 18000*43 c Cash 6500*44 286000 Treasury Stock 6500*43 279500 Additional Paid-in Capital 6500*1 6500 d Cash 273000 Additional Paid-in Capital 6500 Treasury Stock 279500 3 GLOBAL MARINE Balance Sheet (partial) At December 31, Stockholders’ Equity Contributed Capital: Common Stock 600000 Additional Paid-in Capital 5160000 Total Contributed Capital 5760000 Total Contributed Capital 330000 Total 6090000 Treasury Stock at Cost 774000 Total Stockholders’ Equity 5316000