1. a company reported the following stockholders’ equity on january 1 of the current year: common stock, $10 par, 1,000,000 shares authorized, 250,000 shares issued .. $2,500,000 paid-in capital in excess of par, common 1,260,000 retained earnings 1,675,000 total stockholders’ equity ... $5,435,000 prepare journal entries for the following selected transactions related to this company’s stock during the current year: mar. 1 purchased 10,000 shares of treasury stock for $18 per share. may 5 sold 4,000 shares of treasury stock for $16 per share. oct. 12 sold 2,000 shares of treasury stock for $19 per share.

Powell company began the 2018 accounting period with $40,000 cash, $86,000 inventory, $60,000 common stock, and $66,000 retained earnings. during 2018, powell experienced the following events: sold merchandise costing $58,000 for $99,500 on account to prentise furniture store. delivered the goods to prentise under terms fob destination. freight costs were $900 cash. received returned goods from prentise. the goods cost powell $4,000 and were sold to prentise for $5,900. granted prentise a $3,000 allowance for damaged goods that prentise agreed to keep. collected partial payment of $81,000 cash from accounts receivable. required record the events in a statements model shown below. prepare an income statement, a balance sheet, and a statement of cash flows. why would prentise agree to keep the damaged goods?