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National Supplys shareholders equity included the following accounts at December 31, 2023: Shareholders'...

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Accounting

National Supplys shareholders equity included the following accounts at December 31, 2023:

Shareholders' Equity
Common stock, 2 million shares at $1 par $ 2,000,000
Paid-in capitalexcess of par 8,000,000
Retained earnings 70,000,000

Required:

  1. National Supply reacquired shares of its common stock in two separate transactions and later sold shares. Prepare the entries for each of the transactions under each of two separate assumptions: the shares are (a) retired and (b) accounted for as treasury stock.
February 15, 2024 Reacquired 100,000 shares at $7 per share.
February 17, 2025 Reacquired 100,000 shares at $4.50 per share.
November 9, 2026 Sold 50,000 shares at $6 per share (assume FIFO cost).
  1. Prepare the shareholders equity section of National Supplys balance sheet at December 31, 2026, assuming the shares are (a) retired and (b) accounted for as treasury stock. Net income was $10 million in 2024, $11 million in 2025, and $12 million in 2026. No dividends were paid during the three-year period.

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