2 2 0 1 7 | P A G E 2 | JOHN WILEY AND SONS, INC. 2 2...

4 . 2 4 . 2 0 1 7

| P a g e 2

| John Wiley and Sons, Inc.

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Alignment modified

Dr. Income tax expense GAAP amount

Dr. Deferred tax liability Difference

Cr. Income tax payable IRS amount

Page: 98

If the remaining 6,000 shares are reissued for $8 per share:

Dr. Cash 44,000 48,000

Dr. Additional paid-in capital –treasury stock 4,000

Dr. Retained earnings 6,000 2,000

Cr. Treasury stock (6,000 × $9/share) 54,000

Par (or stated value) method. In this method, treasury stock is recorded at par

value and additional paid-in capital is debited for the amount in proportion to the original issue price.

Page: 99

The journal entry for the reacquisition of 10,000 $1 par shares (originally sold for $8 per share) for

treasury stock at $9 per share would be:

Dr. Treasury stock 10,000

Dr. Additional paid-in capital in excess of par

70,000

Dr. Retained earnings

10,000

Cr. Cash

90,000

If 4,000 treasury shares are reissued at $10 per share:

Dr. Cash 40,000

Cr. Treasury stock (4,000 × $9 $1/share) 4,000

Cr. Additional paid-in capital—treasury stock

in excess of par

36,000

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Dr. Cash ($20/share × 1,000 shares) 20,000

Dr. Paid-in capital—stock options 4,000 6,000

Cr. Common stock ($8 × 1,000 shares) 8,000

Cr. Additional paid-in capital—common stock 16,000 18,000

([$20 – $4]

1,000 shares)

Page: 104

Journal entry for the 30% stock dividend (large stock dividend):

Dr. Retained earnings 10,000 30,000

Cr. Common stock dividend distributable 10,000 30,000

(100,000 shares × 10% 30% × $1 par/share)

Dr. Common stock dividend distributable 10,000 30,000

Cr. Common stock 10,000 30,000