Question:

-On January 1, 2014, Agassi Corporation had the subsequent stockholders' equity accounts.

Common Stock ($10 par value, 60,000 shares issued and outstanding) $600,000 

Paid-in Capital in Excess of Par-Common Stock 500,000

Retained Earnings 620,000

During 2014, the subsequent transactions occurred.

Jan. 15 Declared and paid a $1.05 cash dividend per share to stockholders.

Apr. 15 Declared and paid a 10% stock dividend. The market price of the stock was $14 per share.

May 15 needed 2,000 common shares at a market price of $15 per share.

Nov. 15 Reissued 1,000 shares held in treasury at a price of $18 per share.

Dec. 31 Evaluated that net income for the year was $370,000.

-Journalize the above transactions.

Evaluate the ending balances for Paid-in Capital, Stockholders' Equity and Retained Earnings.

-Determine the payout ratio and the return on common stock equity.

-R. Federer is examining Agassi's financial statements and wonders whether the "gains" or "losses" on

Agassi's treasury stock transactions could be included in income for the year. Briefly describe whether, and the conceptual reasons why, profits or losses on treasury stock transactions should be recorded in income.