Exercise 18-5
During the first year of operations, Eastern Data Links Corporation entered into the following transactions
relating to shareholders equity. The articles of incorporation authorized the issue of 8 million common shares,
$1 per share, and 1 million preferred shares, $50 per share.

Prepare the appropriate journal entries to record each transaction.

Exercise 18-11
Bonner Communications articles of incorporation authorized the issuance of 130 million common shares.
The transactions described below effected changes in Borner’s outstanding shares. Prior to the transactions,
Borner’s shareholders’ equity included the following:

Shareholders’ Equity ($ in millions)
Common stock, 100 million shares at $1 par 100
Paid-in capital – excess of par 300
Retained earnings 210

Required: Assuming that Borner Communications retires shares it reacquires (restores their status to that of
authorized but unissued shares), record the appropriate journal entry for each of the following transactionsw:
Exercise 18-13
In 2013, Western Transport Company entered into the treasury stock transactions described below.
In 2011, Western Transport had issued 140 million shares of its $1 par common stock at $17 per share.

Required: Prepare the appropriate journal entry for each of the following transactions:

Exercise 18-15
On two previous occasions, the management of Dennison and Company, Inc.,
repurchased some of its common shares. Between buyback transactions, the corporation issued common shares
under its management incentive plan. Shown below is shareholders’ equity following these share transaction,
as reported by two different methods of accounting for reacquired shares.

1.  Infer from the presentation which method of accounting for reacquired shares is represented by each of the two columns.
2.  Explain why presentation formats are different and why some account balances are different for the two methods.

Exercise 18-19
The shareholders’ equity of CoreTechnologies Company on June 30, 2012 included the following:

Common stock, $1 par, authorized, 8 million shares; issued and outstanding, 3 million shares $3,000,000
Paid-in capital – excess of par $12,000,000
Retained earnings $14,000,000

On April 1, 2013, the board of directors of Core Technologies declared a 10% stock dividend
on common shares, to be distributed on June 1. The market price of Core Technologies
common stock was $30 on April 1, 2013 and $40 on June 1, 2013.

Required: Prepare the journal entry to record the distribution of the stock dividend on the declaration date.


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