During the First Year of Operations, New York Corporation Had

question 123

Essay

During the first year of operations, New York Corporation had the following transactions:
∙ Jan. 1 - Issued 50,000 shares of $1 par value common stock at $20 per share.
∙ May 24 - Reacquired 5,000 shares of common stock sold on Jan. 1 for $23 per share.
∙ Aug. 31 - Sold 500 shares of its treasury stock purchased on May 24 for $25 per share.
∙ Oct. 18 - The board of directors declared and distributed a 10% common stock dividend. The market price of the common stock was $26 per share at the time of the declaration.
∙ Nov. 24 - The board of directors declared a cash dividend of $0.50 per share payable to stockholders on December 8.
∙ Dec. 8 - Paid the cash dividends declared on November 24.
Required:
Prepare the journal entries for the above transactions. Omit explanations.

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Definitions:

Implicit Costs

The opportunity costs of using resources owned by the firm for its own production instead of earning revenue from these resources elsewhere.

Explicit Costs

These are the direct, out-of-pocket payments made by businesses for operational expenses like wages, rent, and materials.

Monetary Outlay

The amount of money spent on a particular transaction or investment.

Implicit Costs

The opportunity costs that arise when a company uses internal resources without a direct payment.