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Thirteenth Edition
Weygandt Kimmel Kieso
Chapter 13
Corporations: Organization and
Capital Stock Transactions
Prepared by
Coby Harmon
University of California, Santa Barbara
Westmont College
Chapter Outline
Learning Objectives
LO 1 Discuss and major characteristics of a corporation.
LO 2 Explain how to account for common, preferred,
and treasury stock.
LO 3 Prepare a stockholders’ equity section.
President and
Chief Executive
Officer
Treasurer Controller
Paid-in capital is the total amount of cash and other assets paid in
to the corporation by stockholders in exchange for capital stock.
Less:
Treasury Stock
Account
ILLUSTRATION 13.10
Treasury stock accounts
LO 2 Copyright ©2018 John Wiley & Son, Inc. 46
Sale of Treasury Stock Below Cost
On December 1, assume that Mead, Inc. sells its remaining
2,200 shares at $7 per share and makes the following entry.
Cash 15,400 Limited to
Paid-in Capital from Treasury Stock 1,200 balance on
hand
Retained Earnings 1,000
Treasury Stock (2,200 x $8) 17,600