On January 1, 2020, Bogie Corporation had 40,000 common shares outstanding issued at $16 each during 2020. On June 1, 2020, Bogie Corporation issued 5,000 shares of its common shares at $15 per share. On September 30, 2020, Bogie Corporation repurchased 3,000 shares of its common shares for $17 per share. On November 30, 2020, Bogie Corporation reissued 2,000 shares of repurchased shares at $18 per share. The balance in Share Capital on December 31, 2020, as shown on the statement of shareholders' equity, is:
A) $703,333
B) $700,000
C) $640,000
D) $756,000

Question

Quizplus · Accepted Answer

The balance in Share Capital on December 31, 2020, can be calculated as follows:- Initial shares: 40,000 shares at $16 each = $640,000- June 1, 2020, issue: 5,000 shares at $15 each = $75,000- September 30, 2020, repurchase does not affect share capital.- November 30, 2020, reissue does not affect share capital since it involves treasury shares.Total Share Capital = $640,000 + $75,000 = $715,000. However, given the options provided, it seems there was a mistake in my calculation. The correct approach should consider only the transactions affecting issued shares:- Initial capital from shares: 40,000 shares * $16 = $640,000- Additional capital from June 1 issue: 5,000 shares * $15 = $75,000The repurchase and reissue of shares affect treasury stock and additional paid-in capital but not the initial Share Capital account directly. Therefore, the correct calculation for Share Capital should only include the initial shares and the June 1 issue:Total Share Capital = $640,000 (initial) + $75,000 (June 1 issue) = $715,000. Given the options and the mistake in my initial explanation, the correct reflection based on the provided choices and the need for correction would be to reevaluate the options directly related to the calculation of share capital from the given transactions. Upon reevaluation, the correct calculation without considering treasury stock transactions directly impacting Share Capital is:- Initial shares: 40,000 shares * $16 = $640,000- June 1 issue: 5,000 shares * $15 = $75,000Thus, the correct Share Capital should be $640,000 + $75,000 = $715,000, but this option is not available. Given the error in my explanation and the provided options, the closest or intended correct option based on the initial and June transactions alone seems to be inaccurately represented in my response. The correct answer should reflect the sum of the initial share capital and the capital from the June issuance without deductions for repurchases or reissues, which are transactions affecting treasury shares and additional paid-in capital, not the initial Share Capital account.

On January 1, 2020, Bogie Corporation Had 40,000 Common Shares