Alpha Corporation has the following ShareholdersA????1 Equity section of the Balance Sheet at 1/1/2004:
Preferred Stock, 10%, $100 Par Value, 10,000 shares authorized, 1,000 issued, and outstanding
$ 100,000
Additional Paid In Capital A????1 Preferred Stock
240,000
Common Stock, $10 Par Value, 100,000 shares authorized, 50,000 shares issued and outstanding
500,000
Additional Paid In Capital A????1 Common Stock
800,000
Total Paid In Capital
$1,640,000
Retained Earnings
2,000,000
Total ShareholdersA????1 Equity
$ 3,640,000
Questions 27 (Stockholders’ Equity):
Assume Alpha sells 500 shares of Preferred Stock for $400 per share. What will be the dollar amount of the increase to Preferred Stock, APIC Preferred Stock, and Retained Earnings?
Increase PStk Increase APIC A????1 PStk Increase RE
a. 200,000 0 0
b. 150,000 50,000 0
c. 0 200,000 0
d. 50,000 150,000 0
e. 50,000 100,000 50,000
WHAT ARE THE STEPS TO GET ANSWER D, AND WHY?
Assume Alpha reacquires share of their own Common Stock to hold in the Treasury. They pay $ 30.00 per share. With this purchase, the impact on Total Paid in Capital and the total Shareholders%uFFFD Equity, respectively, will be
a. increase/increase
b. decrease/decrease
c. increase/decrease
d. decrease/increase
e. none/decrease
WHAT ARE THE STEPS TO GET ANSWER D, AND WHY for this problem also?