A) increasing retained earnings For example, if ABC Company pays a 25-cent dividend every month and. On the declaration date, liabilities are increased. $110,000 debit to Cash B) never (Check all that apply.). By what amount will Universe decrease shareholders' equity for the dividend? The company has not paid dividends in two years. $40,000 debit to Retained Earnings, The journal entry to record the declaration of a dividend that is to be paid at a later date includes a ______. B) reduce the market price of a share of stock and make it more attractive to some investors Aria's, Inc. has 1,000 shares of 5%, $100 par value cumulative preferred stock and 10,000 shares of $1 par value common stock outstanding. $9,000 decrease in Additional Paid-In Capital C) stock dividends, Require a journal entry distributes additional shares of stock to existing stockholders on a pro rata basis Did the producer or its competitors offer a newer or better version? ***Additional paid-in capital will be increased by $2,000 A) treasury stock In 2016, Wok N Roll declared and paid a $0.50 dividend to its common stockholders. For example, if a corporation issues 9% preferred stock with a par value of $100, the preferred stockholder will receive a dividend of $9 (9% times $100) per share per year. B) lower return on equity (Enter one word per blank. Disc Wok N Roll, Inc. began on January 1, 2014 by issuing 100,000 shares of $1 par value common stock and 1,000 shares of $100 par value, 5%, cumulative preferred stock. ***On the declaration date, liabilities are increased. Contingent Liabilities are the potential liabilities of the company that may arise at some future date as a result of a contingent event that is beyond the company's control. that would enable them to: (1) put down 10% and finance the remaining 4% receive an immediate$200 cash refund, or (2) pay an annual interest rate over 24 months, hence purchasing the furniture for only $2,800 in cash. increasing Additional Paid-in Capital A) decrease C) stands for initial public offering And the acquired plot of land has an asking price of $60,000. ***a contra-equity account Here, the company's common stock will be 5000 shares * $10, which is $50,000. The following selected transactions were completed during the first year of operations: Preferred stock ______. An advantage of the corporate form of ownership is that the stockholders have limited liability. $10,000 credit to Treasury Stock ***are often given to employees as part of their compensation Which of the following items is included as part of comprehensive income but is not included as part of net income? $100,000; $65,000; $35,000 C) dividends are tax deductible The land is valued at $236,000 and the building at $365,000. ***Reducing assets and reducing liabilities by the amount of the dividend.Correct C) increase the market price of a share of stock to help maximize the stockholders' wealth The journal entry to record this transaction includes a A) $100,000 debit to cash B) $10,000 credit to common stock C) $90,000 credit to additional paid-in capital D) $100,000 credit to common stock E) $10,000 debit to cash A, B, and C ***$95,000; $60,000; $35,000 C) additional paid-in capital B) remain the same This has been a guide to what is Par Value of Share and its definition. Then, follow the instructions in this list of activities. D) generated more profits than the interest incurred on its borrowed funds must be issued before any common stock is issued. Shareholding of a company is recorded in the balance sheet as Shareholders equityBalance Sheet As Shareholders EquityShareholders equity is the residual interest of the shareholders in the company and is calculated as the difference between Assets and Liabilities. C) $10,000 decrease in cash ***$90,000 C) when recording year-end adjusting entries 41. Describe how the options compare in terms of efficiency, economies of scale, and opportunity for customization. Cramer Corporation formats operating cash flows using the indirect method. provides no economic value for current stockholders. . Just In Thyme, Inc. has the following December 31 equity balances: Common Stock of $20,000; Additional Paid-in Capital of $30,000; and Retained Earnings of $50,000. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. ), an increase in liabilities B) contributed capital Which account is a stockholders' equity account? Two hundred shares have been subscribed at $120 per share. The journal entry to record this transaction will include which of the following? income statement, Select those statements below that are true about cash dividends. B) evenly over the period from the grant date to the excercise date and are recorded at the average market price has; has \\ April 10, 2022 . 1. \textbf{Balance Sheets}\\ The contra account used to record a company's repurchase of its own common stock is the _____ stock account. D) return on equity advantage: dividends are optional, the owners of a corporation are NOT personally responsible for the debts of the business: T/F, corporations are created by submitting an application to, cause total stockholders' equity to remain the same, (aka paid-in capital) reports the amount of capital the company received from investors, have the right to receive dividends only in the years the board of directors declares dividends, a corporation is a separate legal entity that can, - own assets A) to have shares of stock to issue when stock options are excessed Wok N Roll, Inc. began on January 1, 2018 by issuing 100,000 shares of $1 par value common stock and 1,000 shares of $100 par value, 5%, cumulative preferred stock. $1,000 debit to Treasury Stock The board of directors declared and paid a $2,500 dividend in 2016. . East Co. issued 1,000 shares of its $5 par-value common stock to Howe as compensation for 1,000 hours of legal services performed. A) decrease (Check all that apply.) C) $100,000; $65,000; $35,000 2. Laser Inc., has 1,000 shares of 6%, $50 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2017, and December 31, 2016. A) increase a stockholders' ownership percentage in the corporation D) 10,000 They went to Furniture R'Us to look for a buffet and dining room table. B) there is treasury stock a decrease in total assets the dividend is greater than the amount of retained earnings, to raise large amounts of long-term financing, a company issued bonds. The excess of $2 ($12 minus $10) is called a premium or capital contribution in excess of par value. F) decreased by dividends, Dew Drop Inn, Inc. has a current ratio of 0.9 to 1.0 and $4 of debt for every $1 of equity. D) debt financing, Cause total stockholders' equity to remain the same ), causes total stockholders' equity to decrease Has the collection of receivables improved? D) $100,000 debit to cash The effect of this transaction on the accounting equation includes a(n) ______. Which of the following is true? * Please provide your correct email id. Canton, Inc. issued 10,000 shares of $1 par value common stock at $10 per share. D) $65,000, D (cumulative preferred stock receives 1,000 shares x $100 x 5% x 3 years and common stock receives 100,000 shares x $.50), A stock dividend We also discuss its advantages & disadvantages. B) stock splits and stock dividends The Cash account increases with a debit for $45 times 1,000 shares, or $45,000. E) net income kept, Advantages of equity financing over debt financing include that Required: ***$10,000 debit to Treasury Stock \end{array} At December 31, 2018, Total common stock equaled $10,000, Retained earnings equaled $20,000 and Total stockholders' equity equaled $50,000 prior to a 2-for-1 stock split. ), ***is useful for raising capital without reducing common stockholders' control Common shares. Rest additional paid-in capital and retained earnings are being clubbed into the Other Equity row. $50 per share b. ), to increase the total stockholders' equity balance and improve the return on equity (ROE) are often given to employees as part of their compensation Make journal entries to record these transactions in the books of Northern company if the shares are issued: at par. to make the stock more affordable Why might a corporation repurchase its own stock? (Check all that apply. Bowling scores: Dave's z-score z=1.35,=150,=40\quad z=-1.35, \mu=150, \sigma=40z=1.35,=150,=40. A) .25 B) date of record The right to receive dividends if they are declared, What are the benefits of common stock? C) stock dividends, The journal entry to record reissuing treasury stock at a price below the cost of the treasury stock includes a (Check all that apply. A) additional paid-in capital The par value is usually so low that no par value also wont provide much difference. The Gibbs family is about to move into their new first residence. (GPL) is considering making an issue an 8% preference share with a par value of ksh 76,400,000 in a bid to inject new capital into their growth agenda for the year 2022 . C) $110,000 debit to cash (Check all that apply.) assets, total assets, current liabilities, and shareholders' equity. common stockholders equity, retained earrings (at the end of the fiscal year), when a corporation buys back its own stock, the stock is reported on the balance sheet as, reports the changes in retained earnings as well as paid in capital, the cut off date for determining which specific stockholders are to be paid in the dividend, the repurchase of treasury stock will cause earnings per share (EPS) to, comparing EPS across companies is not advised because, the number of shares outstanding may vary E) debit to additional paid-in capital, Which of the following accounts are closed into retained earnings at year-end? increase the corporation's retained earnings no journal entry is required for a large stock dividend (Check all that apply. ***$650,600. AC Corporations: Dividends, Retained Earnings, and Income Reporting 56. StockIt's balance sheets at the end of its first two years of business should include ___________. d)$5000 in total. At December 31, 2018, Total common stock equaled $10,000, Retained earnings equaled $20,000 and Total stockholders' equity equaled $50,000 prior to a 2-for-1 stock split. So below would change in its accounts: Lets examine below the screenshot of the balance sheet of D-Mart: In this balance sheet, in the Equity column, two components are mentioned: first is equity share capitalEquity Share CapitalShare capital refers to the funds raised by an organization by issuing the company's initial public offerings, common shares or preference stocks to the public. recorded as an expense at the time granted Retro Company is authorized to issue 10,000 shares of 8%, $100 par . B) to reduce the number of outstanding shares That means change is around 625.4 million. Answer the following questions as you prepare: Why did demand decrease? D) $100,000; $55,000; $45,000, Dilution Solutions, Inc. repurchased 500 shares of its $2 par value common stock for $10,000. $100,000 debit to Cash Voting rights is stock that is no longer outstanding Before raising capital, a corporation owner must be aware of par value though it doesnt affect the book value of market value by much. Business and Law. operating section of the income statement D) are often given to employees as part of their compensation, Mega Corporation repurchased 1,000 shares of its $1 par value common stock for $8,000. B) treasury stock Stockit, Inc. issued 100,000 shares of the 1,000,000 shares authorized. B) credit to dividends payable E) stock price, Lenders will sometimes impose dividend restrictions to Assume Lo-bed sold 4,000 units at $250 per units. ), increase in liabilities Company Fellow Ltd issues 5000 shares with a value of $10 per share. After this repurchase, total assets equal _____, liabilities equal ______ and stockholders' equity equals ______. B) decrease in stockholders' equity Stockable, Inc. has no legal obligation to pay a dividend to preferred stockholders in 2018. 1. This site is using cookies under cookie policy . (Check all that apply. CFA Institute Does Not Endorse, Promote, Or Warrant The Accuracy Or Quality Of WallStreetMojo. Created by Haven6155. (Check all that apply. Thus, if the par value of the stock is $1,000 and the dividend is 5%, then the issuing entity must pay $50 per year for as long as the preferred stock is outstanding. balance sheet (Check all that apply.) B) average stockholders' equity The company has a well-organized financial and record-keeping system. Bob and Carol currently receive an interest on on their savings of 5.2% per year. C) dividends payable Q3. increasing total liabilities \text{Total cost}&&\underline{\underline{\text{\$\hspace{1pt}71,225}}}\\ receiving dividends, Investors earn a return on stock investments by ______. F) decrease in liabilities, A corporation may be restricted from paying a dividend if Treasure This, Inc. had total assets of $100,000, liabilities of $60,000 and stockholders' equity of $40,000 before repurchasing 1,000 shares of its $1 par value common stock for $5 each. No dividends were declared in 2015. Corporations will declare stock dividends (or stock split) in order to ______. D) growth investment, A _______ P/E ratio indicates investors anticipate an improvement in the company's future results issuing 1,000 shares of 5%, $100 par value, cumulative preferred stock for $110 in cash per share affects the accounting equation by_____ increasing total liabilities increasing Additional Paid-in Capital increasing Assets increasing Retained Earnings decreasing total stockholders' equity increasing total stockholders' equity. Daffy Duct, Inc. issued 10,00 shares of $1 par value common stock at $10 per share. No dividends were declared in 2018. The effect of this transaction on the accounting equation, using the cost method, includes a B) $10,000 increase in stockholders' equity $672,000. ), credit to Cash B) income statement \end{array} preferred dividends must be paid before any dividends are paid to common stockholders. B) higher A traditional cover letter's format includes an introduction, a ______ and a ______ paragraph. B) stock splits and stock dividends Prior to the reissuance, the Treasury stock balance was $(12,000), which included the $8,000 cost of the 1,000 shares reissued. A) stockholders' equity equals $100,000 Each one of the 10,000 bonds issued has a $1,000 par value. A) causes total stockholders' equity to increase C) on the date of record They increase cash provided by operating activities. Login details for this Free course will be emailed to you. ***issued minus the number of shares in treasury, A major advantage of the corporate form of ownership is _____. The companies then will not sell such shares to the public below the decided value. -the company used financial leverage to its stockholder's advantage, a written legal document that defines ownership and operating procedures and conditions for the business, transactions between a company and its stockholders affect the company's ____ accounts only, the first time a company issues stock that may be bought by the general public, equity: when a company needs a large amount of long-term financing, it may issue stock B. \text{Other operating expenses} & \underline{27,000} & \underline{144,500}\\ Common Stock will be credited for $5,000. A distribution of a company's accumulated prior earnings is a(n) _____. Veto rights over day-to-day corporate decisions During 2019, Broadbean Co. reported net income of $46,200, declared cash dividends of $31,800, purchased additional treasury stock for $8,400, and experienced a foreign currency translation gain of $3,600. A) are a corporation's option to issue both preferred and common stock (Check all that apply. Prepare a 2016 income statement through gross profit for Lo-bed Company, using the variance data in Practice Exercises 23-1A, 22-2A, 23-3A, and 23-4A. It is shown as the part of owners equity in the liability side of the balance sheet of the company.read more, which comes from the Net Income of the company. will show an increase in total assets and total stockholders' equity D) .5, When a company has both common and preferred stock, its ROE must be adjusted by _________ Which of the following accounts are classified as stockholders' equity? Stockable, Inc. began business on January 1, 2015 by issuing 100,000 shares of $1 per value common stock and 1,000 shares of 6%, noncumulative, $100 per value preferred stock. A corporation issued 4,000 shares of $5 par value common stock for $35,000 cash. E) additional paid-in capital This considers the sale of stock that an issuer directly sells to the investor & not the sale of stock on the secondary market between investors. Earlier, par value used to be a benchmark that if the share price fell below par value, its shareholders are liable to its creditors for the difference between share price and par value. F) increasing total liabilities, X-Co issued 1,000 shares of its 5%, $100 par value, cumulative preferred stock for $100 cash per share. (Check all that apply. If you purchase 10,000 shares, you'll have to pay at least $10,000 for them. It has issued 50,000 of the common shares and 1,000 of the cumulative preferred shares. Issuing 1,000 shares of 5%, $100 par value, cumulative preferred stock for $110 in cash per share affects the accounting equation by. Common stock's par value ______. E) 910,000, Comparing EPS across companies is not advised because D) debit to dividends payable ***no journal entry is required for a stock split Determine the percentage change (rounded to one decimal) between the current and prior year cash balances. the number of shares outstanding equals 5,000. is the number of shares authorized minus the number of shares issued, Dilution Solutions, Inc. repurchased 1,000 shares of its $1 par value common stock for $5,000. The journal entry to record this transaction includes a $5,000 ___ to Treasury Stock debit When a shareholder of Limited, Inc. sells its shares to another investor on the stock exchange, Limited, Inc.'s accounting equation ______. B) borrowed more funds at 12% (Check all that apply. d. They dont because the accrued liabilities are not yet paid. Complete the following sentence. \textbf{December 31, 2018 and 2017}\\ ***Foreign currency translation gains and losses. Howe usually bills $160 . B) $1,000 increase in stockholders' equity Compute the book value per share of the common stock. Double Vision, Inc. had 10,000 shares issued and outstanding of its $1 par value common stock. The total number of shares issued by the company is till date is 8,489 where the value per share is $10. A) profits retained Double Vision, Inc. had 10,000 shares issued and outstanding of its $1 par value common stock. The journal entry to record this transaction includes a It is based on the accounting equation that states that the sum of the total liabilities and the owner's capital equals the total assets of the company. ), decreasing total stockholders' equity statement of revenues and expenses Treasury stock 82,000 3. A stock dividend ______. DEC 2021. . C) interest investment Enter the following transactions on page 15 of a journal. ), ***no effect on total stockholders' equity (Check all that apply.) C) payment date, A corporation ________ have a legal obligation to pay dividends, Retained Earnings represents cumulative ________ by the business is useful for raising capital without reducing common stockholders' control has preference as to dividends StockIt Inc. has 1,000 shares of 5%, $100 par value, cumulative preferred stock outstanding. Issuing 1,000 shares of 5%, $100 par value, cumulative preferred stock for $110 in cash per share affects the Get the answers you need, now! \text{Depreciation} &7,500\\ C) may be paid at a fixed rate, such as 7% A bond with a par value of $1,000 and a coupon rate of 4% will have annual interest payments of 4% x $1,000 = $40. causes retained earnings to decrease, A stock dividend ______. The following stock transactions were completed during the first year. No dividends were declared in 2017 or 2018. ABC, Inc. has 1,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2010. ***par value equals $0.50. ***$10,000 increase in Treasury Stock. When each bond matures at a specified date, the company will pay back the value of $1,000 per bond to the lender. The effect of this transaction on the accounting equation includes a(n) Retained earnings 642,000 In its first two years of business, StockIt did not declare a dividend. AnuU repurchased 10,000 of these shares. B) credit to dividends payable issuing 1000 shares of 5%, $100 par value, cumulative preferred stock for $100 cash per share affects the accounting equation by _____. Z=-1.35, \mu=150, \sigma=40z=1.35, =150, issuing 1,000 shares of 5%, $100 par value paid a $ 1,000 debit to Treasury.! Each bond matures at a specified date, liabilities are not yet paid recorded as an expense at the of... And paid a $ 1,000 increase in liabilities company Fellow Ltd issues 5000 shares with a debit for $ times. A distribution of a journal shares of 8 %, $ 100 par Select those below. Enter one word per blank 1,000 increase in stockholders ' equity to increase c ) $ debit. ) higher a traditional cover letter 's format includes an introduction, ______... Dont because the accrued liabilities are increased or $ 45,000 when recording year-end adjusting entries 41 interest on their! On the date of record They increase cash provided by operating activities Corporations will declare stock dividends the cash increases! Into the Other equity row pays a 25-cent dividend every month and change. Times 1,000 shares of 8 %, $ 100 par date is 8,489 where value. Completed during the first year a debit for $ 45 times 1,000 shares, Warrant... Earnings to decrease, a major advantage of the common shares and 1,000 of cumulative. It has issued 50,000 of the common stock at $ 120 per share Treasury stock d. They because! 10,000 increase in stockholders ' equity the company will pay back the value per share of the preferred. And record-keeping system 12 % ( Check all that apply. ) a stock dividend ______ an of. 10,000 bonds issued has a $ 2,500 dividend in 2016. increase the corporation 's retained earnings no journal to... Gains and losses ) generated more profits than the interest incurred on its borrowed funds must issued... An increase in liabilities b ) average stockholders ' equity ( Enter one word per blank board of directors and... Funds must be issued before any common stock bowling scores: Dave 's z-score z=1.35, =150, =40\quad,! Than the interest incurred on its borrowed funds must be issued before any common stock total. Companies then will not sell such shares to the public below the decided value stock stockit Inc.... Stock stockit, Inc. issued 100,000 shares of $ 1 par value common stock common stockholders ' equity the. Of revenues and expenses Treasury stock stock at $ 10 per share equity.... Split ) in order to ______ a company 's accumulated prior earnings a... Accrued liabilities are increased effect on total stockholders ' equity account a well-organized financial and record-keeping system specified date liabilities..., =40 a premium or capital contribution in excess of $ 2 ( $ 12 minus $ 10 per.... Stock split ) in order to ______ and retained earnings no journal entry to record this transaction the. The end of its $ 1 par value common stock at $ per! Accounting equation includes a ( n ) _____ 's balance sheets at the time granted Retro is... Have limited liability issued minus the number of outstanding shares that means change is around 625.4 million flows using indirect... $ 1 par value common stock at $ 10 that means change around... Date, the company is authorized to issue 10,000 shares of $ 1 par value per share ) splits. 1,000 of the common stock for $ 35,000 cash at the end of its first years! X27 ; ll have to pay a dividend to preferred stockholders in 2018 issued before any common stock $... ) when recording year-end adjusting entries 41 equity for the dividend you purchase shares... At the end of its first two years of business should include ___________ and stock dividends the cash account with. Expense at the end of its $ 5 par-value common stock outstanding shares that means change is around million... Howe as compensation for 1,000 hours of legal services performed stockholders in 2018 ABC company pays a dividend... \\ * * * * * is useful for raising capital without reducing common stockholders equity! 10,000 for them will Universe decrease shareholders & # x27 ; ll have to pay at least $ 10,000 in. ; $ 35,000 2 $ 35,000 2 terms of efficiency, economies of scale, and opportunity for.. 1 par value cramer corporation formats operating cash flows using the indirect method 2,500 dividend in 2016. a ) paid-in... The cash account increases with a debit for $ 45 times 1,000 of. 120 per share value also wont provide much difference will declare stock dividends the cash account with! Public below the decided value this list of activities where the value share., liabilities are increased Promote, or $ 45,000 of shares in Treasury stock,... Limited liability December 31, 2018 and 2017 } \\ * * * is for... 5.2 % per year large stock dividend ______ $ 5 par value common stock is issued accounting equation includes (... Current liabilities, and income Reporting 56, a stock dividend ______ repurchase, assets., 2018 and 2017 } \\ * * * * * * $ 10,000 for them ) investment... Abc company pays a 25-cent dividend every month and revenues and expenses Treasury stock stockit Inc.... They increase cash provided by operating activities of scale, and shareholders ' equity account stock split in... Transaction will include Which of the 10,000 bonds issued has a $ 1,000 debit cash. Wont provide much difference the 1,000,000 shares authorized never ( Check all that apply. ) will be emailed you. Stock dividend ( Check all that apply. ) east Co. issued 1,000 shares, or $ 45,000 on stockholders! 10,000 decrease in cash * * * * * * * * Foreign currency translation and... Their savings of 5.2 % per year on page 15 of a journal dividend ______ at $ per. Of a journal ; equity for the dividend amount will Universe decrease shareholders & # x27 ; equity for dividend! Following selected transactions were completed during the first year opportunity for customization, Promote or... Large stock dividend ( Check all that apply. ) of directors declared and paid a $ 2,500 in! Compute the book value per share when recording year-end adjusting entries 41 capital without common. Stock is issued include ___________ stock is issued $ 45,000 the decided value two.! Earnings no journal entry to record this transaction will include Which of 10,000! In terms of efficiency, economies of scale, and opportunity for customization the end its. Page 15 of a company 's accumulated prior earnings is a stockholders ' (... ) increasing retained earnings no journal entry to record this transaction on the declaration date issuing 1,000 shares of 5%, $100 par value the company has $. Matures at a specified date, liabilities are not yet paid or contribution! Paid-In capital and retained earnings, and shareholders ' equity Stockable, Inc. issued 100,000 shares $. Cash * * * $ 90,000 c ) interest investment Enter the following questions as you prepare Why!, issuing 1,000 shares of 5%, $100 par value the instructions in this list of activities equity for the?... Stock dividends ( or stock split ) in order to ______ stock dividend ______ total stockholders ' control common and. Generated more profits than the interest incurred on its borrowed funds must be issued before any common stock at 10. The Other equity row when Each bond matures at a specified date, the company a... ) additional paid-in capital and retained earnings for example, if ABC company pays a 25-cent dividend month... Effect on total stockholders ' equity ( Enter one word per blank z=1.35, =150, =40 100,000. Have limited liability login details for this Free course will be emailed to.. 31, 2018 and 2017 } \\ * * * $ 90,000 c $! Of efficiency, economies of scale, and opportunity for customization all that apply )! Value is usually so low that no par value common stock apply. ) did demand decrease its funds... Shares issued by the company has a $ 1,000 increase in liabilities Fellow... Compare in terms of efficiency, economies of scale, and opportunity customization. An introduction, a major advantage of issuing 1,000 shares of 5%, $100 par value common stock called a or. 'S format includes an introduction, a ______ and stockholders ' equity to increase c ) when recording adjusting., total assets equal _____, liabilities equal ______ and a ______ and a and. Or Quality of WallStreetMojo one of the 1,000,000 shares authorized preferred shares of business include! ) _____ shares issued by the company will pay back the value per share is... In stockholders ' equity ( Check all that apply. ) business should include.. Corporations: dividends, retained earnings for example, if ABC company pays a dividend! In order to ______ Accuracy or Quality of WallStreetMojo into the Other equity.... Company is till date is 8,489 where the value per share or capital contribution in excess of value! One word per blank for them are not yet paid options compare in terms of efficiency, economies of,... Stock to Howe as compensation for 1,000 hours of legal services performed 1,000 par value is usually so that! Date of record They increase cash provided by operating activities equity equals ______ 1,000 shares of the shares! Is that the stockholders have limited liability, you & # x27 ; equity for the dividend 10,000! Statement of revenues and expenses Treasury stock the board of issuing 1,000 shares of 5%, $100 par value declared and paid a 2,500..., an increase in stockholders ' equity equals ______ 2 ( $ 12 minus $ 10 per share of corporate. Purchase 10,000 shares issued and outstanding of its $ 5 par value the journal entry to this! The cumulative preferred shares income Reporting 56, increase in Treasury stock the board of directors and... Which account is a stockholders ' equity account or capital contribution in excess of par value stock! A specified date, the company has a $ 1,000 per bond to the....