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On June 8, Steering Ltd was incorporated and issued 56,000 common shares for $280,000. On August...

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Accounting

On June 8, Steering Ltd was incorporated and issued 56,000common shares for $280,000. On August 19, an additional 14,000shares were issued for $84,000. On November 2, the company paid$29,760 to reacquire 6,200 common shares and on December 7 it paid$51,350 to reacquire 7,900 common shares.

Calculate the average cost of the common shares on June 8,August 19, November 2, and December 7.

Answer & Explanation Solved by verified expert
3.6 Ratings (516 Votes)

ans 1 june 8 th
Number of stock value
issue 56000 280,000
therefore average price = 280000/56000 5.00
ans 2 19-Aug
Number of stock value
issue 56000 280,000
additional 14000 84000
70000.0 364000.0
Average price = =364000/70000 5.20
ans 3 2-Nov
Number of stock value
issue 56000 280,000
additional 14000 84000
70000.0 364000.0 5.20
Note : reacquired stock will not impact equity it will be treated as treasury stock
ans 4 7-Dec
Number of stock value
issue 56000 280,000
additional 14000 84000
70000.0 364000.0 5.20
Note : reacquired stock will not impact equity it will be treated as treasury stock

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