Clockworks Company began business on January 1 and immediately issued 600,000 shares of its $2 par value common stock for $16,000,000. At the end of the year it paid $600,000 in cash dividends. In midyear, the firm bought back some of its own shares. The company reports the following additional information at December 31:
A. How much is the Additional Paid-in Capital account at the end of the year?
B. Determine the retained earnings amount at the end of the year.
C. How many shares of stock are in the treasury at the end of the year?

Question

Clockworks Company began business on January 1 and immediately issued 600,000 shares of its $2 par value common stock for $16,000,000. At the end of the year it paid $600,000 in cash dividends. In midyear, the firm bought back some of its own shares. The company reports the following additional information at December 31:
  A. How much is the Additional Paid-in Capital account at the end of the year?
B. Determine the retained earnings amount at the end of the year.
C. How many shares of stock are in the treasury at the end of the year?

Quizplus · Accepted Answer

The Answer of Clockworks Company began business on January 1 and immediately issued 600,000 shares of its $2 par value common stock for $16,000,000. At the end of the year it paid $600,000 in cash dividends. In midyear, the firm bought back some of its own shares. The company reports the following additional information at December 31:
  A. How much is the Additional Paid-in Capital account at the end of the year?
B. Determine the retained earnings amount at the end of the year.
C. How many shares of stock are in the treasury at the end of the year?

Clockworks Company Began Business on January 1 and Immediately Issued