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Home / Questions / Issuing common and preferred stock generally has been popular among corporations. However,

Issuing common and preferred stock generally has been popular among corporations. However,

Issuing common and preferred stock generally has been popular among corporations. However, some companies have bought back their common stock. For example, because its stock had declined under the uncertainty of possible health care reforms, Bristol-Myers Squibb bought 25 million of its own shares. Other companies have been awash in cash because of the decline in interest rates, layoffs to cut costs, and decreased need to make new investments. Quaker Oats purchased 4.8 million of its own shares for $323 million and plans to purchase 5 million more. The Quaker Oats treasurer was quoted as saying, "We spend on new products, we make acquisitions, we raise the dividend, and we still can't soak up the cash." Sun Microsystems cut its outstanding shares by 9 percent with an aggressive buyback program, and PepsiCo purchased 50 million shares at a cost of $1.8 billion. For what reasons would a company buy back its own shares?

 

 

198.Prepare entries in journal form necessary to record the following stock transactions of Fitzgerald Corporation. These transactions represent all treasury stock transactions entered into by the company. (Omit explanations.)

 

June

1

 

Purchased 2,000 shares of its own $30 par value common stock for $70 per share, the current market price.

 

10

 

Sold 500 shares of treasury stock purchased on June 1 for $80 per share

 

20

 

Sold 700 shares of treasury stock purchased on June 1 for $58 per share.

 

30

 

Retired the remaining shares purchased on June 1. The original issue price was $42 per share.

 

 

 

 

 

 

 

 

 

 

 

 

General Journal

Page 1

Date

Description

Post.

Ref.

Debit

Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dec 10 2019 View more View Less

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