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    Computing Equity

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    The shareholders' equity section of the balance sheet of TNL systems Inc. included the following accounts at December 31, 2010:

    Shareholders' equity $ in Million
    Common stock, 240 million shares at $1 pare $240
    Paid-in-capital - excess of par 1,680
    Paid-in capital - share repurchase 1
    Retained earnings 1,100

    Required:

    1. During 2011, TNL Systems reacquired shares of its common stock and later sold shares in two separate transactions. Prepare the entries for both the purchase and subsequent resale of the shares assuming the shares are (a) retired and (b) viewed as treasury stock.

    a. On February 5, 2011, TNL systems purchased 6 million shares at $10 per share
    b. On July 9, 2011, the corporation sold 2 million shares at $12 per share
    c. On November 14, 2013, the corporation sold 2 million shares at $7 per share

    2. Prepare the shareholders' equity section of TNL Systems' balance sheet at December 31, 2013, comparing the two approaches. Assume all net income earned in 2011-2013 was distributed to shareholders as cash dividends.

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    https://brainmass.com/business/dividends-stock-repurchase-and-policy/computing-equity-497717

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    The shareholders' equity section of the balance sheet of TNL systems Inc. included the following accounts on December 31, 2010:

    Shareholders' equity $ in Million
    Common stock, 240 million shares at $1 par $240
    Paid-in-capital - excess of par 1,680
    Paid-in capital - share repurchase 1
    Retained earnings 1,100

    Required:

    1. During 2011, TNL Systems reacquired shares of its common stock and later sold shares in two separate transactions. Prepare the entries for both the purchase and subsequent resale of the shares assuming the shares are (a) retired ...

    Solution Summary

    The expert examines computing shareholders' equity section of the balance sheets.

    $2.19

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