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The Kramer Company was started when it issued 200 shares of $5 par value common stock at a market price of $20 per share. The company repurchased 10 shares at a market price of $15 per share. Later the company reissued 5 shares at a market price of $20 per share. At the end of the first year of operation the companys equity included $1,200 of retained earnings in addition to its contributed capitol. The total amount of stockholder's equity a the end of the first year would be

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TomShelby

Answer:

Total Equity: 5,200

Explanation:

200 share at $5 par value

common stock $20

treasury stock

10 shares at $15

reissued 5 at $20

Common stock              1,000 (200 shares at 5)

Paid in excess of par    3,075 (A)

retained earnings          1,200

Treasury Stock        ($25)        (5 shares at 5)

Paid- excess of par TS ($50)   (5 shares at 15-5 = 5 x 10 = 50)

Total Equity: 5,200

(A)

when issue the shares:

cash        4000

  cs                                   1000

  paid in excess of par   3000

when reissued TS

cash       100

      treasury stock                          25

      paid in excess of par TS          50

     paid in excess of par  CS          25

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